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Banca Sammarinese di Investimento S.p.A. BILANCIO DI ESERCIZIO 2012 BILANCIO DI ESERCIZIO 2012 BILANCIO DI ESERCIZIO 2012 BILANCIO DI ESERCIZIO 2012 REPORT OF THE BOARD OF DIRECTORS ON THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED ON 12/31/2012 Dear Shareholders, we are pleased to submit the Financial Statements as at 12/31/2012 for your consideration and for your approval. Before illustrating the Bank's activities and the results achieved during the financial year, it is considered necessary to refer briefly to the economic international trend of the Republic of San Marino, with a focus on banking and financial system. The international economic situation 2012 has been a year characterized by a slowdown, due to reduced activity in both advanced countries and emerging ones and involving the world economy. The expectations on the growth of the global economy have been revised downwards in the years 2012/2013. In the Euro Area the differences in growth between countries are confirmed, but the slowdown has also been extended to the traditionally stronger economies; Italy, Spain, Portugal and Greece appear instead already in recession, as well as Belgium and the Netherlands. In the first half of 2012, in economic terms, the GDP has increased in Japan, the United States and Germany, and has remained steady in France and fell in Italy and UK. According to OECD estimates, overall, the aggregate GDP of the G7 for 2012 will increase by 1.4%, but in a very uneven manner: Germany will grow by 0.9%, France will remain stationary, and Great Britain will decline by 0.7%, while the U.S.A. and Japan will grow by 2.3% and 2.2%, respectively. Italy, Spain, Portugal and Greece were particularly affected by the crisis of the industrial field, with significant reductions in orders and loss of entire production units, with a strong deterioration in the rates of unemployment, especially among young people. The economic slowdown also affects the economies of the BRIC countries, with growth stood at 3% with regard to Brazil, and development respectively of 7.5%, 6.6% and 4%, relative to China, India and Russia. According to the latest projections by the International Monetary Fund (IMF), spread in October 2012, the world economy would increase by 3.3 percent this year and 3.6 next year (3.8 in 2011). The slowdown in 2012 was due in large part to the weakening of the economic activity in the Euro Area and in emerging countries. The trend of GDP would remain highly heterogeneous: in both years, it would expand to rhythms of less than 2 percent in all the advanced countries and more than 5 in the emerging economies. The global economic outlook is subject to high risks associated with the uncertainty over the sovereign debt crisis in the Euro area and the intensity of the slowdown in emerging economies, as well as on the strongly strict fiscal policy that would result in the beginning of 2013 in the United States due to the absence of numerous tax breaks and the entry into force of the public spending cuts agreed in August 2011. Further downside risks stem from the possibility of sharp increases in oil prices as a result of the tensions in the Middle East. Forecasts of GDP growth 2011 2012 2013 United States 1,8 2,2 2,1 Euro area 1,4 -0,4 0,2 Italy 0,4 -2,3 -0,7 Germany 3,1 0,9 0,9 France 1,7 0,1 0,4 Spain 0,4 -1,5 -1,3 Great Britain 0,8 -0,4 1,1 pagina 1 di 51

Transcript of Banca Sammarinese di Investimento S.p.A. BILANCIO DI … · 2017-08-29 · Banca Sammarinese di...

Page 1: Banca Sammarinese di Investimento S.p.A. BILANCIO DI … · 2017-08-29 · Banca Sammarinese di Investimento S.p.A. BILANCIO DI ESERCIZIO 2012 REPORT OF THE BOARD OF DIRECTORS ON

Banca Sammarinese di Investimento S.p.A.

BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012REPORT OF THE BOARD OF DIRECTORS

ON THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED ON 12/31/2012

Dear Shareholders,we are pleased to submit the Financial Statements as at 12/31/2012 for your consideration and for your approval.Before illustrating the Bank's activities and the results achieved during the financial year, it is considered necessary to

refer briefly to the economic international trend of the Republic of San Marino, with a focus on banking and financialsystem.

The international economic situation

2012 has been a year characterized by a slowdown, due to reduced activity in both advanced countries and emergingones and involving the world economy. The expectations on the growth of the global economy have been reviseddownwards in the years 2012/2013.

In the Euro Area the differences in growth between countries are confirmed, but the slowdown has also been extendedto the traditionally stronger economies; Italy, Spain, Portugal and Greece appear instead already in recession, as well asBelgium and the Netherlands.

In the first half of 2012, in economic terms, the GDP has increased in Japan, the United States and Germany, and hasremained steady in France and fell in Italy and UK. According to OECD estimates, overall, the aggregate GDP of the G7for 2012 will increase by 1.4%, but in a very uneven manner: Germany will grow by 0.9%, France will remain stationary,and Great Britain will decline by 0.7%, while the U.S.A. and Japan will grow by 2.3% and 2.2%, respectively.

Italy, Spain, Portugal and Greece were particularly affected by the crisis of the industrial field, with significant reductionsin orders and loss of entire production units, with a strong deterioration in the rates of unemployment, especially amongyoung people.

The economic slowdown also affects the economies of the BRIC countries, with growth stood at 3% with regard to Brazil,and development respectively of 7.5%, 6.6% and 4%, relative to China, India and Russia.

According to the latest projections by the International Monetary Fund (IMF), spread in October 2012, the worldeconomy would increase by 3.3 percent this year and 3.6 next year (3.8 in 2011). The slowdown in 2012 was due in largepart to the weakening of the economic activity in the Euro Area and in emerging countries.

The trend of GDP would remain highly heterogeneous: in both years, it would expand to rhythms of less than 2 percent inall the advanced countries and more than 5 in the emerging economies.

The global economic outlook is subject to high risks associated with the uncertainty over the sovereign debt crisis in theEuro area and the intensity of the slowdown in emerging economies, as well as on the strongly strict fiscal policy thatwould result in the beginning of 2013 in the United States due to the absence of numerous tax breaks and the entry intoforce of the public spending cuts agreed in August 2011. Further downside risks stem from the possibility of sharpincreases in oil prices as a result of the tensions in the Middle East.

Forecasts of GDP growth

2011 2012 2013

United States 1,8 2,2 2,1

Euro area 1,4 -0,4 0,2

Italy 0,4 -2,3 -0,7

Germany 3,1 0,9 0,9

France 1,7 0,1 0,4

Spain 0,4 -1,5 -1,3

Great Britain 0,8 -0,4 1,1

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Banca Sammarinese di Investimento S.p.A.

BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012Japan -0,8 2,2 1,2

Russia 4,3 3,7 3,8

China 9,2 7,8 8,2

India 6,8 4,9 6,0

Brazil 2,7 1,5 4,0

Source: FMI – World Economic Outlook 10/2012

At the same time, the climate in international financial markets has improved but remains uncertain, reflecting theweakness of the economy, the uncertainty on the timing and mode of requests for aid from the countries in difficulty, theconditions to be applied, on the state of some national banking systems. Such stresses could make it more difficult to

take the necessary adjustment measures.

The situation in San Marino

The economy of San Marino has experienced a general decline of the main indicators as a result of a combination offactors that have a negative impact in the period.

The already difficult international situation collided with an internal crisis of the system originated, among other things,from the problems related to the housing market, the events that have affected the financial system and the persistenceof a tense relations with neighboring Italy that has determined, even for 2012, the non-inclusion of San Marino in the"white list" despite the signing of the Agreement on economic / financial cooperation in June 2012.

The macroeconomic scenario shows that 2012 was the fifth consecutive year of decline in GDP (-2%), in particular dueto the real estate sector and the arising allied industries. Also another important economic sector for San Marino such astourism was adversely affected by the international crisis; the influx of tourists has decreased over the year by about170,000 (from 2,038,359 in 2011 to 1,869,393 in 2012).

GDP at constant prices

2007 2008 2009 2010 2011

San Marino +3,5 -3,4 -12,8 -5,2 -2,6

Source: FMI – World Economic Outlook 10/2012

The economic activities (corporations, sole proprietorships, freelancers, etc.) decreased by 301 units, rising from 5,908 to5,607 active subjects (in particular, the companies declined from 3,208 to 2,919).

Another fact of considerable concern is the reduction of public and private employees, which rose from 19,500 to 18,612units, with a simultaneous increase in the unemployment rate, which rose from 4.72% as at 12/31/2011 to 5.70% as at

12/31/2012 (1,332 units).

The residents in the Republic increased by 291 units, rising from 32,166 of 12/31/2011 to 32,457 as at 12/31/2011 as at12/31/2012; the households have remained virtually unchanged (from 13,870 to 13,880 as at 12/31/2012).

Inflation is beginning to grow again, and after dropping to 2.8% in August 2011, in September 2012 stood at 3.1%.

As stated by the IMF, the economy of San Marino cannot return to a sustained growth in the absence of a fullnormalization of relations with Italy. However, significant progress has been achieved to meet the internationaldemands, from the weakening of banking and tax secrecy, the application of more accurate exchange of informationin tax matters and the fight against money laundering.

The financial system in San Marino

The financial sector was made up as at 12/31/2012 from 33 authorized persons, almost halved over the previous year (asat 12/31/2011 persons authorized by BCSM were 62). This decrease is due to merger and consolidation of credit

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Banca Sammarinese di Investimento S.p.A.

BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012institutions (IBS/BAC, Bank Partner/CIS, BSM/SMIB, Asset Bank/BCS) and to liquidations, voluntary and unfortunatelyrelocated, which involved several financial companies. Even for 2013 further reductions are expected.

The pooled system data show a general continuation of the volumes after 4 years of strong declines. Compared with the

data of the end of 2011 with those of 09/30/2012 (last date of data survey by BCSM) it should be noted that directdeposits remained virtually unchanged (5.068 million Euros as at 09/30/2012 compared to 5.15 billion Euros of12/31/2011), the indirect funding has increased from 2119 to 2216 million Euros, so the total deposits increased slightlyfrom 7269 to 7285 million Euros (+ 0.22%).

On the contrary lending slowed down from 3.839 million Euros of 12/31/2011 to 3.691 billion million of 09/30/2012 (- 3.86%).Similar to neighboring Italy, it continues to deteriorate the quality of the loan portfolio, in which the incidence of sufferingincreased and has gone from 10.2% of 12/31/2011 to 12.21% of 09/30/2012.

The total net assets of the banks of San Marino have decreased from 749 million to 612 million Euros. This decline reflectsnot only the reduced ability to produce income, even the transfers of assets and liabilities between banks of San Marino,refined over the first nine months of 2012 following the known mergers.

The reading of the aggregated data of the system, showed in the following table, helps to understand that the financialsystem of San Marino has undergone distortion in recent years.

31/12/2008 31/12/2009 31/12/2010 31/12/2011 30/09/2012

Direct collection 9.162 7.146 5.900 5.150 5.068

Indirect collection 4.650 3.043 2.617 2.119 2.216

Total collection 13.812 10.190 8.517 7.269 7.285

Lending 5.399 5.169 4.858 3.839 3.691

Net assets 1.214 1.068 749 612

Source: BCSM – data in millions of Euro

San Marino Investment Bank

Dear Shareholders,

the year 2012 was a turning point for San Marino Investment Bank, which gave concrete start to the planned extensionof the corporate mission, presented and authorized by BCSM in December 2011.

The Bank, while maintaining and continuing to strengthen the financial sector, a service that over the years has reachedlevels of excellence, intended to be characterized as a retail bank serving families and businesses in the area, with thegoal of protecting and enhance savers' deposits and assist, through targeted funding, both the private sector andproduction stages. The expansion of the branch network aims at reaching this goal.

During the year, it has followed up on the planned capital increase which has allowed us to bring the share capital ofour institute to EUR 16,200,000.

We briefly retrace the major events of 2012.

In February, the employees already present in the company, were supported by new professionals including the GeneralDirector. These are resources with specific skills, all aiming at achieving the objectives set by the aforementionedbusiness plan for expansion. In detail, the number of the employees has gone from 9 as at 12/31/2011 to 24 as at12/31/2012.

On 03/31/2012 it was successfully performed the migration of the information system from the XF procedure to the

GESBANK procedure. The adoption of this application, approved as part of the expansion plan, ranks as a corollary ofthe development strategy undertaken, as this information system is a flexible and economically competitive instrument.GESBANK has also become the reference application of San Marino banking system, being adopted by as many as 4out of 7 institutions.

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Banca Sammarinese di Investimento S.p.A.

BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012In May the branch in Dogana was opened; in July, the branch of Borgo Maggiore, while during the autumn therestructuring of Rovereta branch has been completed. The territorial development project will be completed with theopening of the branch in Città, scheduled for next June. The restructuring of the rooms of the headquarters of theGeneral Management for Rovereta is currently underway to complete.

From the second quarter of 2012, the Bank has enriched its offer, acquiring new services and products. We remind youthe main ones:

- ability to deliver different types of Subsidized Loans, thanks to agreements signed with the Secretariat ofFinance of the Republic of San Marino;

- Web Banking service of the latest generation with on-line information, functionality of Interbank CorporateBanking and complete reports in PDF format;

- online trading service evolved through specific agreements signed with SAXO BANK;- placement of international debit cards, Conad Cards, Viacard Telepass;- POS service and service of e-commerce;- accession to the SMAC convention for the placement of cards and POS;- possibility to subscribe GPMs and PACs of various kinds;

- realization of the ATM network at any branch.

Please also note that the Bank is enrolled in the Professional Trustee Register at the BCSM, although, to date, this activityhas not yet been initiated.

The Bank has also started a major revision and redefined the organization that resulted in the approval of the neworganizational and functional chart of the new company by the Board of Directors. At the same time, it was updatedand integrated throughout the domestic legislation in order to make it functional and compliant with the neworganizational structure. This revision was also aimed at containing the operational risk because the bank has adopted arigid structure of executive powers and has clearly defined the responsibilities related to them.

Particular attention was paid to risk management and the internal control system by increasing staffing of theCompliance-Inspectorate and using external consultants with proven experience with the task to train and support the

new staff.

With regard to the credit risk, it has being carried out a thorough analysis of loan positions with a view to riskclassification, putting in place any useful initiative aimed at the recovery and protection of the same in the case of non-performing loans. Given the particular economic time, the institute puts extreme emphasis on the monitoring of thecredit risk that is routinely analyzed by the Credit Risk Control Office.

The bank has taken extreme caution with regard to the investment policies in securities in order to limit market, interestrate and counterpart risk.

The Board of Directors, taking into account the still small size of the Institute and the inevitable incompatibility betweenthe roles, evaluated also the absence on the market of personnel with an appropriate professional profile, preferred to

outsource the Risk Manager, using the San Marino company called San Marino Advisor Srl, which already has beenworking with leading companies in the financial landscape of the Republic.

Also for 2012, the Internal Audit function has been outsourced to the company Baker Tilly Consulaudit of Bologna, anItalian leading accounting firm.

Below please find the main data of the Financial Statements and Income Statement.

Total deposits at the end of 2012 amounted to € 235,671,434 of which € 146,560,317 of direct funding and € 89,111,117 ofindirect funding. The figure for the previous year registers a growth of more than 66 million Euros (+39%), which is clearlyhigher than that recorded by the system.

With regard to the treasury of the Bank, as at 12/31/2012, we highlight liquidity:a) for € 54,309,070 arising from interbank deposits at sight and with an end, to which must be added currency deposits,almost exclusively in U.S. dollars, for a total of € 2,091,947;b) income from securities for € 56,186,386 divided on different issuing entities; in particular, the trading book amounted to€ 42,003,708 and € 14,182,678 in investment securities.

The total cash amounts, therefore, to € 112,587,403, considerable amount given the size of the Bank and the downturn ofthe economy in general. The investment strategies have been inspired by prudence and diversification criteria, in a very difficult environment,where in addition to the crisis in the real economy scenarios of possible collapse of the single European currency haveexperienced.

On the lending side, the year 2012 has been characterized by a substantial increase in loans to ordinary customers,

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Banca Sammarinese di Investimento S.p.A.

BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012which amounted to € 49,327,929 at the end of year (+53%) of which € 7,539,716 arising from finance leases. This increasewas made thanks to the strategy adopted on credit, aimed at splitting it, both in terms of number of positions assignedas well as in terms of technical forms used.

As for the non-performing loans, impaired loans for € 5,720,874 and liabilities for € 840,657 are registered on 12/31/2012.There are also past due/overdue for € 11,720. The data shown are net of value adjustments which totaled € 2,328,107

We highlight the important audit of the bank's loan portfolio performed in 2012 that, with the fundamental contributionof the Shareholders, led to perform value adjustments on loans to customers for € 6,859,753 and € 547,498 on financialinvestments. Please refer to the notes to accounts for further details.

The net assets of the bank at 12/31/2012 amounted to € 16,311,163, increasing compared to the amount of the previousyear (+13%). At the same time, it decreased, due to the strong volume growth, the ratio of net assets / balance sheetassets, which rose from 11.43% in 2011 to 9.28% in 2012.

The bank holds no treasury shares.

The profit earned is equal to € 106,685, net of the various provisions made; the profit of the last year stood at € 3,693. Theeconomic result achieved, however, is positive in the presence of a so unfavorable economic situation; it is of greatsatisfaction if you take into account the important investments made during the year, for the realization of the project toexpand the company's mission described above.

Among the indicators of income that have the highest increases, we point out the net interest income grew by 29.09%,from € 1,030,862 in 2011 to € 1,330,766 in 2012, profits from financial transactions increased by 165 , 80% from € 942,978 in2011 to € 2,506,464 in 2012. At the same time, they are obviously increased the operating costs from € 2,034,960 to €2,975,066 in 2012 (+ 46.20%).

Dear members, in consideration of the foregoing and of the results obtained, we invite you to approve these Financial

Statements, proposing the capitalization of all income earned, subject to the provisions required.

The Board of Directors The Chairman

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Banca Sammarinese di Investimento S.p.A.

BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012STATEMENT AS PER FORMER ART. 6, PARAGRAPH X OF LAW NO. 47 DATED FEBRUARY 23, 2007 AND SUBSEQUENT

AMENDMENTS

- Dr. Enzo Donald Mularoni, born in Detroit (USA) on September 9, 1952, a resident of Borgo Maggiore (RSM) in Via

Brandolina no. 51, ISS code 15821, a citizen of San Marino, Chairman of the Board of Directors of “Banca Sammarinese di

Investimento S.p.A.”, based in Rovereta (RSM), Via Monaldo da Falciano no. 02, registered under no. 2771 of the Register

of Companies of San Marino, C.O.E. SM 18493, attached to the notes to the financial statements for the year ended on

December 31, 2012;

- Emanuel Colombini, born in San Marino (RSM) on February 28, 1978, a resident of Serravalle (RSM) in Strada del Cardio

no. 61, ISS code 22616, a citizen of San Marino, a director of “Banca Sammarinese di Investimento S.p.A.”, based in

Rovereta (RSM), Via Monaldo da Falciano no. 02, registered under no. 2771 of the Register of Companies of San Marino,

C.O.E. SM 18493, attached to the notes to the financial statements for the year ended on December 31, 2012;

- Roberto Ragini, born in San Marino (RSM) on May 3, 1956, a resident of Dogana (RSM) in Via Tre Settembre no. 184, ISS

code 9689, a citizen of San Marino, a director of “Banca Sammarinese di Investimento S.p.A.”, based in Rovereta (RSM),

Via Monaldo da Falciano no. 02, registered under no. 2771 of the Register of Companies of San Marino, C.O.E. SM 18493,

attached to the notes to the financial statements for the year ended on December 31, 2012;

declare

under their own responsibility, the permanence for every one of the objective and subjective conditions required by the

law no. 47 dated February 23, 2006 and subsequent amendments and additions for the assumption of the office of

director.

_________________________ _________________________

Dr. Enzo Donald Mularoni Emanuel Colombini

_________________________

Roberto Ragini

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Banca Sammarinese di Investimento S.p.A.

BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BALANCE SHEET: ASSETSBALANCE SHEET: ASSETSBALANCE SHEET: ASSETSBALANCE SHEET: ASSETS

31/12/2012 31/12/2011

Part amounts Total amounts Part amounts Total amounts

10 Cash and cash equivalents 528.228 261.696

20 Inter-bank loans 56.401.017 37.393.784

(a) sight credits 26.569.007 26.830.308

(b) other credits 29.832.010 10.563.476

30 Customer loans 41.788.213 28.554.882

40 Bonds and other debt securities 56.186.386 50.328.032

(a) issued by public bodies 7.942.156 990.000

(b) issued by banks 39.701.609 39.624.794

- of which: own securities - 5.053.689

(c) issued by financial institutions (companies) 5.772.768 7.428.807

(d) issued by other bodies 2.769.853 2.284.431

50 Shares, quotas and other capital securities - 395.481

60 Holdings - -

70 Holdings in group businesses - -

80 Intangible fixed assets 745.839 226.915

- of which: goodwill - -

90 Tangible fixed assets 8.277.044 3.726.974

- of which: leasing 7.539.716 3.587.401

- of which: assets to be leased - -

100 Uncalled capital - -

110 Owned shares and quotas - -

120 Other assets 10.500.712 5.350.915

130 Accrued revenues and deferred expenses: 1.364.150 97.412

(a) accrued revenues 1.238.896 57.622

(b) deferred expenses 125.254 39.790

140 TOTAL ASSETS 175.791.589 126.336.091

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Banca Sammarinese di Investimento S.p.A.

BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BALANCE SHEETS : LIABILITIESBALANCE SHEETS : LIABILITIESBALANCE SHEETS : LIABILITIESBALANCE SHEETS : LIABILITIES

31/12/2012 31/12/2011

Part amounts Total amounts Part amounts Total amounts

10 Debts with banks 154.078 107.535

(a) sight debts 154.078 107.535

(b) term or notice debts - -

20 Debts with customers 42.822.726 42.455.858

(a) sigh debts 38.802.442 21.928.418

(b) term or notice debts 4.020.284 20.527.440

30 Debts represented by securities 95.493.100 56.666.000

(a) bonds - 10.000.000

(b) certificates of deposit 95.493.100 46.666.000

(c) other securities - -

40 Other liabilities 11.470.809 3.941.321

50 Accrued expenses and deferred revenues : 1.354.530 693.687

(a) accrued expenses 1.351.678 693.687

(b) deferred expenses 2.852 -

60 Staff retirement allowances 174.449 28.587

70 Risks and costs funds : 30.734 -

(a) retirement and similar costs funds - -

(b) tax funds - -

(c) other funds 30.734 -

80 Allowances for possible loan losses - -

90 Fund for general banking risks - 250.000

100 Subordinated liabilities 7.980.000 8.000.000

110 Corporate capital 16.200.000 13.000.000

120 Issue premium - -

130 Reserves 4.478 1.189.410

(a) ordinary reserves 738 445.866

(b) treasury stock reserves - -

(c) extraordinary reserves 2.954 738.322

(d) other reserves 786 5.222

140 Revaluation reserves - -

150 Profits (Losses) carried forward - -

160 Profits (Losses) for the financial year 106.685 3.693

170 TOTAL LIABILITIES 175.791.589 126.336.091

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Banca Sammarinese di Investimento S.p.A.

BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012GUARANTEES AND COMMITMENTSGUARANTEES AND COMMITMENTSGUARANTEES AND COMMITMENTSGUARANTEES AND COMMITMENTS

31/12/2012 31/12/2011

Part amounts Total amounts Part amounts Total amounts

10 Guarantees issued 1.135.075 1.145.669

- of which:

(a) acceptances - -

(b) other guarantees 1.135.075 1.145.669

20 Commitments 1.157.654 21.148.027

- of which:

(a) certain to be called on 1.075.654 21.148.027

of which: financial instruments 148.496 21.148.027

(b) not certain to be called on 82.000 -

of which: financial instruments - -

(c) other commitments - -

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Banca Sammarinese di Investimento S.p.A.

BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012PROFIT AND LOSS ACCOUNTPROFIT AND LOSS ACCOUNTPROFIT AND LOSS ACCOUNTPROFIT AND LOSS ACCOUNT

31/12/2012 31/12/2011

Part amounts Total amounts Part amounts Total amounts

10 Interest received and proceeds 4.225.297 3.011.828

- of which:

(a) on customer loans 1.357.527 1.175.029

(b) on debt securities 1.602.611 1.428.659

20 Interest paid and cost (2.894.531) (1.980.966)

- of which:

(a) on debts with customers (270.997) (683.449)

(b) on debts represented by securities (2.614.380) (1.295.767)

30 Dividends and other proceeds: 5.650 -

(a) on shares, quotas and other variable income securities

5.650 -

(b) on holdings - -

(c) on holdings in group businesses - -

40 Commissions earned 267.348 281.267

50 Commissions paid (190.080) (74.698)

60 Profits (Losses) from financial operations 2.506.464 942.978

70 Other operating proceeds 1.428.743 266.511

80 Other operating costs - (92)

90 Administrative costs: (2.949.731) (1.878.250)

(a) labour costs (1.937.031) (690.602)

- salaries and wages (1.418.932) (504.224)

- pension contributions (343.650) (111.037)

- retirement allowances (174.449) (53.712)

- severance indemnity-related costs - (21.629)

(b) other administrative costs (1.012.700) (1.187.648)

100 Value adjustments on intangible fixed assets (123.732) (79.740)

110 Value adjustments on tangible fixed assets (1.330.346) (343.389)

120 Provisions for risks and costs - -

130 Provisions to allowances for possible loan losses - -

140 Value adjustments on credits and provisions for

guarantees and commitments

(6.859.753) (75.000)

150 Value recoveries on credits and provisions for

guarantees and commitments

- -

160 Value adjustments on financial assets (547.498) -

170 Value recoveries on financial assets - -

180 Profit (Loss) on ordinary activities (6.462.169) 70.449

190 Extraordinary proceeds 6.489.736 120.039

200 Extraordinary costs (170.882) (186.795)

210 Extraordinary Profit (Loss) 6.318.854 (66.756)

220 Variation to the fund for general banking risks 250.000 -

230 Income tax for the financial year - -

240 Profit (Loss) for the financial year 106.685 3.693

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Banca Sammarinese di Investimento S.p.A.

BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012RESTATED BALANCE SHEETRESTATED BALANCE SHEETRESTATED BALANCE SHEETRESTATED BALANCE SHEET

ASSETSASSETSASSETSASSETS

31/12/2012 Impact 31/12/2011 Impact

Inter-bank loans 56.401.017 32,08% 37.393.784 29,60%

Customer loans 41.788.213 23,77% 28.554.882 22,60%

Debt and capital securities 56.186.386 31,96% 50.723.513 40,15%

Leased assets 7.539.716 4,29% 3.587.401 2,84%

AF INTEREST-BEARING ASSETS 161.915.332 92,11% 120.259.580 95,19%

Cash and cash equivalents 528.228 0,30% 261.696 0,21%

Intangible fixed assets 745.839 0,42% 226.915 0,18%

Tangible fixed assets 737.328 0,42% 139.573 0,11%

Other assets 10.500.712 5,97% 5.350.915 4,24%

Accrued revenues and deferred expenses 1.364.150 0,78% 97.412 0,08%

ANF NON-INTEREST-BEARING ASSETS 13.876.257 7,89% 6.076.511 4,81%

TOTAL ASSETS 175.791.589 100,00% 126.336.091 100,00%

LIABILITIESLIABILITIESLIABILITIESLIABILITIES

31/12/2012 Impact 31/12/2011 Impact

Debts with banks 154.078 0,09% 107.535 0,09%

Debt with customers 42.822.726 24,36% 42.455.858 33,61%

Debts represented by securities 95.493.100 54,32% 56.666.000 44,85%

Subordinated liabilities 7.980.000 4,54% 8.000.000 6,33%

PO BEARING LIABILITIES 146.449.904 83,31% 107.229.393 84,88%

Other liabilities 11.470.809 6,53% 3.941.321 3,12%

Accrued expenses and deferred revenues 1.354.530 0,77% 693.687 0,55%

Staff retirement allowances 174.449 0,10% 28.587 0,02%

Risks and costs funds 30.734 0,02% - -

PNO NON-BEARING LIABILITIES 13.030.522 7,41% 4.663.595 3,69%

Fund for general banking risk - - 250.000 0,20%

Corporate capital 16.200.000 9,22% 13.000.000 10,29%

Reserves 4.478 0,00% 1.189.410 0,94%

Profit (Loss)for the financial year 106.685 0,06% 3.693 0,00%

PAT ASSETS 16.311.163 9,28% 14.443.103 11,43%

TOTAL LIABILITIES 175.791.589 100,00% 126.336.091 100,00%

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Banca Sammarinese di Investimento S.p.A.

BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012RECLASSIFIED INCOME STATEMENTRECLASSIFIED INCOME STATEMENTRECLASSIFIED INCOME STATEMENTRECLASSIFIED INCOME STATEMENT

31/12/2012 31/12/2011 Variation

Interest received and proceeds 4.225.297 3.011.828 40,29%

Interest paid and cost (2.894.531) (1.980.966) 46,12%

MI INTEREST MARGIN 1.330.766 1.030.862 29,09%

Commissions earned 267.348 281.267 (4,95%)

Commissions paid (190.080) (74.698) 154,46%

CN NET COMMISSIONS 77.268 206.569 (62,59%)

Dividends and other proceeds 5.650 - -

Profits/Losses from financial operations 2.506.464 942.978 165,80%

MINT INTERMEDIATION MARGIN 3.920.148 2.180.409 79,79%

Administrative costs (2.949.731) (1.878.250) 57,05%

Value adjustments on intangible fixed assets (123.732) (79.740) 55,17%

Value adjustments on tangible fixed assets (1.330.346) (343.389) 287,42%

Other operating proceeds/costs 1.428.743 266.419 436,28%

CO OPERATING COSTS (2.975.066) (2.034.960) 46,20%

RG GROSS OPERATING PROFIT 945.082 145.449 549,77%

Value adjustments on credits (6.859.753) (75.000) 9046,34%

Value adjustments on financial assets (547.498) - -

Extraordinary proceeds/costs 6.318.854 (66.756) (9565,60%)

Variation to the fund for general banking risks 250.000 - -

RN PROFIT FOR THE FINANCIAL YEAR 106.685 3.693 2788,84%

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Banca Sammarinese di Investimento S.p.A.

BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012HIGHLIGHTSHIGHLIGHTSHIGHLIGHTSHIGHLIGHTS

Key balance sheet figures (in EUR)Key balance sheet figures (in EUR)Key balance sheet figures (in EUR)Key balance sheet figures (in EUR)

31/12/2012 31/12/2011 31/12/2010 31/12/2009

Total assets 175.791.589 126.336.091 120.381.234 123.543.656

Net lending 49.327.929 32.142.283 31.193.354 30.434.182

Net non-performing loans 6.573.251 11.783.243 10.497.560 9.542.087

Provision for adjustments on doubtful loans 2.156.832 1.078.132 1.001.809 1.465.094

Direct collection 146.560.317 102.107.309 99.626.334 101.087.577

Indirect collection: 89.111.117 62.014.090 62.242.966 81.923.079

- operated 17.264.481 - - -

- managed 71.846.636 62.014.090 62.242.966 81.923.079

Net equity 16.311.163 14.443.103 14.615.410 14.603.999

Main structural and operational highlights Main structural and operational highlights Main structural and operational highlights Main structural and operational highlights

31/12/2012 31/12/2011 31/12/2010 31/12/2009

Number of employees 24 10 10 8

Counters 3 1 1 1

Main economic and operation data (in EUR)Main economic and operation data (in EUR)Main economic and operation data (in EUR)Main economic and operation data (in EUR)

31/12/2012 31/12/2011 31/12/2010 31/12/2009

Interest margin 1.330.766 1.030.862 942.988 1.213.825

Intermediation margin 3.920.148 2.180.409 2.630.260 4.497.362

Administrative costs 2.949.731 1.878.250 2.024.655 1.583.185

Personnel costs 1.937.031 690.602 774.403 708.015

Operating costs 2.975.066 2.034.960 2.232.276 1.780.260

Profit for the financial year 106.685 3.693 6.189 1.142.903

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Banca Sammarinese di Investimento S.p.A.

BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012RATIOSRATIOSRATIOSRATIOS

Structural ratios (%)Structural ratios (%)Structural ratios (%)Structural ratios (%)

31/12/2012 var. 31/12/2011 var. 31/12/2010 var. 31/12/2009

Direct collection / Total assets 83,37 2,55 80,82 (1,94) 82,76 0,94 81,82

Net lending / Total assets 28,06 2,62 25,44 (0,47) 25,91 1,28 24,63

Net lending / Direct collection 33,66 2,18 31,48 0,17 31,31 1,20 30,11

Operated collection / Indirect collection 19,37 19,37 - - - - -

Managed collection / Indirect collection 80,63 (19,37) 100,00 - 100,00 - 100,00

Net equity / Total assets 9,28 (2,15) 11,43 (0,71) 12,14 0,32 11,82

Net equity/ Net lending 33,07 (11,87) 44,93 (1,92) 46,85 (1,13) 47,99

Indicators of the quality of credit (%)Indicators of the quality of credit (%)Indicators of the quality of credit (%)Indicators of the quality of credit (%)

31/12/2012 var. 31/12/2011 var. 31/12/2010 var. 31/12/2009

Net NPLs / Net lending 1,70 (12,52) 14,23 9,88 4,35 (0,71) 5,06

Net problem loans / Net lending 11,60 7,20 4,40 (8,09) 12,49 12,49 0,00

Net doubtful credits / Net lending 13,33 (23,33) 36,66 3,01 33,65 2,30 31,35

Net NPLs / Net equity 5,15 (26,51) 31,67 22,39 9,27 (1,26) 10,54

Profitability ratios (%)Profitability ratios (%)Profitability ratios (%)Profitability ratios (%)

31/12/2012 var. 31/12/2011 var. 31/12/2010 var. 31/12/2009

Interest margin / Intermediation margin 33,95 (13,33) 47,28 11,43 35,85 8,86 26,99

Interest margin / Interest-bearing assets 0,82 (0,04) 0,86 0,04 0,82 (0,24) 1,06

Intermediation margin / Interest-bearing assets

2,42 0,61 1,81 (0,48) 2,29 (1,63) 3,92

Administrative costs / Intermediation margin 75,25 (10,90) 86,14 9,17 76,98 41,77 35,20

Cost / Income 75,89 (17,44) 93,33 8,46 84,87 45,28 39,58

Net profit / (Net Equity – Net profit) [R.O.E.] 0,66 0,63 0,03 (0,02) 0,04 (8,45) 8,49

Net profit / Total Assets [R.O.A.] 0,06 0,06 0,00 (0,00) 0,01 (0,92) 0,93

Efficiency ratios (in thousands of EUR)Efficiency ratios (in thousands of EUR)Efficiency ratios (in thousands of EUR)Efficiency ratios (in thousands of EUR)

31/12/2012 var. 31/12/2011 var. 31/12/2010 var. 31/12/2009

Total deposits per employee 9.820 (6.592) 16.412 225 16.187 (6.689) 22.876

Net loans per employee 2.055 (1.159) 3.214 95 3.119 (685) 3.804

Intermediation margin per employee 163 (55) 218 (45) 263 (299) 562

Average personnel costs 81 12 69 (8) 77 (11) 89

Total operating costs per employee 124 (80) 203 (20) 223 1 223

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Banca Sammarinese di Investimento S.p.A.

BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012

Situation of net loans to customers

(*) data at 30/09/2012

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Performing loans

86,67%

Past due / Overrun loans

0,02%

Substandard loans

11,60%

Non-performing loans

1,70%

2012 - Banca Sammarinese di Investimento

Performing loans

63,34%

Past due / Overrun loans

18,03%

Substandard loans

4,40%

Non-performing loans

14,23%

2011 - Banca Sammarinese di Investimento

Other loans

89,76%

Non-performing loans

10,24%

2011 - Sammarinese banking system

Other loans

87,89%

Non-performing loans

12,11%

2012 - Sammarinese banking system (*)

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Banca Sammarinese di Investimento S.p.A.

BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012STATEMENT OF CASH FLOW STATEMENT OF CASH FLOW STATEMENT OF CASH FLOW STATEMENT OF CASH FLOW

FUNDS GENERATED AND COLLECTED 2012

Funds generated and collected 9.202.028

Profit for the financial year 106.685

Value adjustments on intangible fixed assets 2.001.576

Value adjustments on credits and provisions for guarantees and commitments 6.859.753

Provision for severance pay 174.449

Provision for risks and charges 59.565

Increase in funds collected 47.430.842

Other liabilities 7.529.488

Debts with banks 46.543

Debts evidenced by securities 38.827.100

Debts with customers 366.868

Accrued expenses and deferred revenues 660.843

Decrease in funds invested 395.481

Shares and other equity 395.481

Variation to net equity 3.200.000

Increase in share capital 3.200.000

Total funds generated and collected 60.228.351

FUNDS USED AND INVESTED 2012

Write-backs and use of funds generated from management operations 57.418

Use of provisions for risks and charges 28.831

Use of the provision for severance pay 28.587

Increase in funds invested 58.712.308

Other assets 5.149.797

Cash and cash equivalents 266.532

Inter-bank loans 19.007.233

Customer loans 20.093.084

Intangible fixed assets 642.656

Tangible fixed assets 5.880.416

Bonds and other debt securities 6.405.852

Accrued revenues and deferred expenses 1.266.738

Decrease in funds collected 20.000

Subordinated liabilities 20.000

Variation to net equity 1.438.625

Change in reserve for general banking risks 250.000

Working capital reserves 1.188.625

Total funds used and invested 60.228.351

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Banca Sammarinese di Investimento S.p.A.

BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012Section ASection ASection ASection A

ASSESSMENT CRITERIAASSESSMENT CRITERIAASSESSMENT CRITERIAASSESSMENT CRITERIA

The Financial Statements related to the financial year ended on December 31, 2012 were prepared in accordance withthe provisions of Regulation no. 2008-02 on the preparation of the financial statements of banks issued on September 23,2008 (and updated on December 7, 2012) from the Central Bank of the Republic of San Marino, in accordance withArticle 39 of Law No. 165 dated November 17, 2005.The Financial Statements include the Balance Sheet, the Guarantees and Commitments, the Income Statement and theNotes to the accounts. The Financial Statements shall be accompanied by the report of the Directors on themanagement, the report of the Statutory Auditors and the Report of the Independent Auditors.The Financial Statements shall be drawn up clearly and give a true and fair view of the assets, the financial situation andthe result of of its operations.The values shown are expressed in Euros and are compared with those of the previous financial year. We also apply theregulations issued by the Central Bank, Supervision Division.

The algebraic sum of the differences arising from the rounding of the items is recorded under "Other assets / liabilities" inthe balance sheet and under "Extraordinary income/expenses" in the Income Statement.The various items of the Financial Statement are reflected in the corporate accounting which was prepared incompliance with the various administrative events occurred during the period.The true and fair representation is made according to the provisions of the Law; in the event of an exception, thereasons and the relevant influence on the representation of the balance sheet, the financial position and the results ofoperations are explained in the notes to the accounts.In order to improve the level of clarity and truth of the Financial Statements, the accounts were prepared in such a way,where possible, to privilege the representation of the substance over form. In order to provide a representation of thefinancial position closer to the actual movements of the financial balance sheet of the bank, accounts "above the line"are prepared to give preference, where possible, to the time of settlement of transactions rather than the bargainingone.

The recognition of income and expenses is in accordance with the accrual principle, regardless of the collection dateand payment date, and the principle of prudence. Priority is given to the latter principle, provided that there is noexplicit formation of reserves.In order not to reduce the information content of the Financial Statements data according to the principles of truth andclarity, no item compensations were made.The depreciation and amortization of assets are carried out solely by the direct adjustment decreasing the value ofthese elements with the exception of the value adjustments on receivables in implied leasing, which are detectedthrough allocations to provisions for risks and charges to item 70 of Liabilities.

Section 1 - Presentation of the assessment criteriaSection 1 - Presentation of the assessment criteriaSection 1 - Presentation of the assessment criteriaSection 1 - Presentation of the assessment criteria

The assessment of assets and liabilities shown in the Financial Statements and out of them are carried out according tothe principle of prudence and the going concern basis.

* Cash and cash equivalents (item 10 of assets)

This item includes legal currency, including banknotes and coins in foreign currency, money orders, cashier's and postalchecks as well as similar securities, warrants and securities due on demand. It also includes coins and collection medalsas well as gold, silver and stamps.

* Inter-bank loans (item 20 of assets)

This item includes all amounts due from banks, regardless of their technical form, except those represented by financialinstruments that must be allocated to the item no. 40 "Bonds and other debt instruments" and are recorded at their

estimated realizable value.Receivables from banks include the countervalue of the repurchase agreements, in which the assignee bank has theobligation to resell the securities to the transferor bank. The amount is equal to the price paid in cash. The assetstransferred continue to appear in the portfolio held by the transferor bank.

* Customer loans (item 30 of assets)

This item includes credits arising from contracts of financing to customers, whatever is their technical form, and providedthat, to the extent that, there was the actual disbursement of the loan. The credits not yet disbursed, althoughrecognized under accounting records as "contract date", are not included in this item, but in the relevant item of the

securities. The credits represented by securities are recorded under item 40 "Debt securities and other debt instruments."The partial payments received for past due or overdue directly reduce the value of the receivables. Payments received

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Banca Sammarinese di Investimento S.p.A.

BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012in advance against receivables not yet due are included in liabilities, "due to customers" or "other liabilities", dependingon whether the payments themselves are bearing interest or not.This item also includes credits arising from finance leases for installments due and not yet received and relatedreceivables for default interest.

Among the "Credits to customers" there is the value of the repurchase agreements, in which the customer has theobligation to repurchase the underlying securities to the bank. The amount recorded is equal to the price paid in cash.The credits are recorded in the balance sheet according to the estimated realizable value determined on the basis ofthe solvency of the debtor and, at a flat rate, depending on the situation of debt-servicing difficulties faced by thecountry of residence of the debtor.The determination of the net realizable value is made based on an evaluation of all the elements characterizing thetrend of the relationships, supported by the balance sheet, income statement and financial debtors information, by thenature of the business and any guarantees given.

In detail:

- Non performing loans: they identify the area of the credits, regardless of the forecast of potential losses to persons in a

state of insolvency, even if not established by a court, or in similar situations; this item includes the entire exhibition beforeinterests accounted and recognized for expenses incurred in the recovery activities of the ground portion of the interestdeemed not recoverable. The assessment of non-performing credits is analyzing the chances of recovery on anindividual basis and determining the relative loss alleged.

- Substandard loans: they are loans to borrowers under temporary difficulties, which it is expected to be resolved within areasonable period of time. The assessment is carried out on an individual basis. Furthermore, the Substandard loans as aresult of Regulation no. 2008-02, also include funding for which they were due and not paid, even if only partially:3 half-yearly installments or 5 quarterly installments for the loans of original maturity of more than 36 months2 half-yearly installments or 3 quarterly installments whose duration is less than or equal to 36 monthsIf the amortization schedule of the loan provided monthly installments, the number of overdue and unpaid feesconsidered is as follows:

equal to 7 for loans longer than 36 monthsequal to 5 for the loans of less than 36 months.

- Past due and/or overrun loans: they identify with all exposures to individual customers holding cash and off-balance sheet loans, other than the doubtful and substandard ones, which, to date, have expired or overdue on an ongoing

basis by more than 90 days; if such exposures amount to 20% of overall exposure, a write-down was expected for these loans.

- Loans to countries at risk: they are exposures due from borrowers belonging to the countries of Zone B; this category is aresidual part of loans, so a general write-downs was made

- Restructured loans: these are the cash and "off balance sheet" loans for which a bank, due to the deterioration of the financial situation of the borrower, agrees to modify the original contractual terms (i.e., rescheduling of deadlines, debt and/or interest reduction, etc.) that give rise to a loss. Excluded are loans to companies for which it is provided for the cessation of the activity (for example, cases of voluntary liquidation or similar situations). The assessment also excludes the loans whose anomalous situation is due solely to factors pertaining to the country risk.

- Performing loans: these are written down based on a standard method, to ensure coverage of the so-called "inherent risk"; the impairment of receivables is performed with downward adjustment of the value recorded in the balance sheet.

* Bonds and other debt securities (item 40 of assets)

The securities portfolio consists of securities held for investment and trading securities held for trading and treasury.This item includes all debt instruments held in the portfolio of the bank, comprising tangible and intangible assets, such asgovernment bonds, bonds, certificates of deposit and other financial instruments at fixed or variable income.The assessments were performed in accordance with Regulation no. 2008-02 dated 09/23/2008 by the BCSM on the

preparation of the Financial Statements of the banks.

Investment portfolio

The financial instruments of the investment portfolio, including all listed and unlisted financial instruments intended to beheld for long term by the bank (until the natural expiry, unless exceptional events) are valued at their acquisition cost.

They are written down in the event of permanent impairment of the ability to repay the debt by the issuer and therelated country risk. These write-downs will be eliminated at if their reasons lack. Listed and unlisted financial instrumentson organized (regulated) markets, which are "off balance sheet" transactions related to the investment portfolio, applythe same accounting policies as set forth above.Please note that the long-term active and / or passive accrued expense depending on the result achieved by thedifference between the cost to book and the nominal repayment amount divided by the remaining life of the security.

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Banca Sammarinese di Investimento S.p.A.

BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012

Trading portfolio

This portfolio includes all financial instruments held for investment purposes but for trading purposes to meet the cashand trading requirements.The financial instruments which form part of the trading portfolio, listed or unlisted on an organized (regulated) market,are valued at market value. For the listed financial instruments, the market value is the value of listing. For the unlistedfinancial instruments, the market value is determined based on the value of similar listed and unlisted instruments or if thisis not possible, based on reasonable estimates.The determination of the value of trading securities is made by reference to the value determined at the date of thebalance sheet.

The capital gains and losses, arising from the comparison between the market value at the date of December 31, 2012with the latest book value, have been accounted for in the income statement.

* Intangible fixed assets (item 80 of assets)

Intangible assets are recorded at their original acquisition cost, adjusted for amortization carried out directly,systematically, based on the expected remaining life. The ordinary annual depreciation rate is 20%. With reference tothe intangible assets related to contracts, the depreciation was calculated based on the duration of the latter.

* Tangible fixed assets (item 90 of assets)

Tangible fixed assets are recorded at their purchase cost, including ancillary costs and any additional expenses toincrease.The depreciation of fixed assets is carried out systematically with direct adjustment of the value by using the tax ratesestablished by the Rey Decree no. 3 dated January 20, 1986, deemed adequate and representative of the valuecorresponding to the remaining useful life of the asset. If the asset has a value below the cost, we proceed to itsdevaluation. The impairment losses recognized in prior periods are not maintained if the reasons lack.Please note that the letter Prot. 5584 dated 05/18/2012 by Tax Office of the Republic of San Marino has authorized therequest of the bank to use depreciation equal to one half of the ordinary fee in relation to all durable goods acquired

during the year to enhance the technical infrastructure of the Institute, so taking into account the actual useful life of theassets.

* Financial lease (leasing)

The amount of the assets under finance leases is recorded in item 90 of "tangible assets". Loans related to finance leasetransactions are determined using the financial method, as provided by Law no. 115 dated 11/19/2001, and recorded asassets for the algebraic balance obtained by the difference between the capital funded or the historical cost of theasset and the related accumulated amortization powered by the principal amount of the fees due.The interests of the fees accrued during the financial year are under item 10 of the income statement "Interest income

and similar income on receivables" and, the capital is under items 70 "Other operating income" and 110 "Valueadjustments on tangible assets" for the same amount with a neutral effect on the operating result.

* Assets and liabilities in currency

The assets and liabilities and the off balance sheet transactions are valued at the spot rate as at the balance sheet

date, as set out in art. III.II.6 of Regulation no. 2008-02. The effect of this valuation is recognized in the income statement.Foreign currency "off balance sheet" transactions are recorded at the spot rate of exchange as at the balance sheetdate; in the case of spot transactions not yet settled or "hedging" transactions. In the latter case, the spreads betweenspot exchange rate and term to maturity of the contracts are recorded in the income statement according to criteria oftiming and complement the interest on the assets and liabilities being hedged: it shall be counted in the incomestatement 10 and 20 "Interest income (expense) and income (expense)".

* “Off balance sheet" transactions (other than those on currency)

Off balance sheet transactions are assessed using the same criteria as for the assets / liabilities recognized in the

financial statements according to whether they are recorded as intangible assets or non-constituent fixed assets.The contracts for the sale of (spot or forward) securities, not yet settled at the balance sheet date, are assessed usingcriteria consistent with those adopted for the assessment of the securities in the portfolio.

* Debts to banks (item 10 of liabilities)

This item includes all amounts due to banks, regardless of their technical form, except those represented by financial

instruments that should be brought under item 30.Amounts due to banks include the amount of the value of the securities received by the originating bank in the

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BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012operations of repurchase agreements and swaps in which the assignee bank assumes the obligation to resell.The above items are recorded at their nominal value.

* Debts to customers (item 20 of liabilities)

This item includes all amounts due to customers, regardless of their technical form, except those represented by financialinstruments that must be allocated to the item no. 30.Amounts due to customers include the amount of the countervalue of the securities received by the originating bank inthe operations of repurchase agreements and swaps in which the client transferee customer assumes the obligation toresell.The above items are recorded at their nominal value.

* Debts represented by securities (item 30 of liabilities)

Debts represented by financial instruments are recorded at their nominal value.This item, as well as bonds and certificates of deposit, includes in the item "other financial instruments", theiracceptances as well as atypical securities traded in Art. II.III.8 of Regulation no. 2007-07. Also included are financial

instruments of debt that, at the date of the balance sheet, have not yet been repaid.The "Repurchase agreements" operations on securities with customers, which provide that the transferee is obliged toresell the securities involved in the transaction, shown as "Term or with deposit due to customers b)" and are recorded attheir "spot" value, while the underlying securities are shown under the item "Bonds and other debt securities."

* Other assets – Other liabilities (item 120 of assets – item 40 of liabilities)

This item includes all assets and liabilities not attributable to other assets or liabilities. It includes also balances ("debitbalance" or "credit balance") of temporary or suspense items not allocated to destination accounts. Among otherliabilities, the means of payment drawn on the bank, such as bank drafts, are also under detection.

* Accrued expenses and deferred income (items 130 and 50 of liabilities)

They are recognized in accordance with the principle of accrual, however, the principle adopted for accounting of allincome and expenses, the share of interest income and expense and other income and expenses.Prepayments and accrued income are shown separately in the balance sheet in the appropriate sub-items of the assetsand liabilities.

* Staff retirement allowances (item 60 of liabilities)

The Provision for severance indemnities (TFR) fully covers the seniority of all the employees of this company accrued atthe balance sheet date, will be paid directly to the beneficiaries on an annual basis as permitted by applicable laws.

* Provisions for risks and charges (item 70 of liabilities)

These funds are intended solely to cover the losses, expenses or debts of a specific nature, either probable or certain,but for which, at the balance sheet date, have an uncertain amount and date of occurrence.Provisions for risks and charges include:- Provisions made for taxes to be paid, calculated based on a realistic estimate of the tax burden, in relation to the taxprovision in force;- Provisions to cover potential liabilities of which the exact amount or date of occurrence is not known;- Provisions on implicit leasing receivables.

* Guarantees

This item includes all the guarantees provided by the bank as well as the assets sold as guarantee obligations of thirdparties.

* Commitments

This item includes every irrevocable certain or uncertain commitment, which may give rise to credit risks (i.e. marginsavailable on irrevocable lines of credit granted to customers or banks).The commitments arising from derivative contracts are valued in relation to their notional value.Guarantees issued and commitments are recorded as follows:- The contracts of deposit and loan based on the amount to be given;- The irrevocable lines of credit based on the residual amount to be used;

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BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012- Other commitments and guarantees based on the value of the contractual commitment by the Bank.

Section 2 - Adjustments and tax provisionsSection 2 - Adjustments and tax provisionsSection 2 - Adjustments and tax provisionsSection 2 - Adjustments and tax provisions

No provisions and value adjustments solely for tax purposes were performed.

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BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012Section B/1Section B/1Section B/1Section B/1

INFORMATION ON THE STATEMENT OF ASSETS ANDINFORMATION ON THE STATEMENT OF ASSETS ANDINFORMATION ON THE STATEMENT OF ASSETS ANDINFORMATION ON THE STATEMENT OF ASSETS ANDLIABILITIES: ASSETSLIABILITIES: ASSETSLIABILITIES: ASSETSLIABILITIES: ASSETS

Cash and cash equivalents (item 10 of assets)

Table 1.1

Breakdown of assets item 10 “Cash and cash equivalents”

The item 10 "Cash and cash equivalents" includes all of the money and coins in Euros and foreign currency lying in thebranches of the Institute. The increase, compared to the previous survey, is due to the new availability of cash held atthe banks of the two new branches of Borgo Maggiore and Dogana.

Variation

31/12/2012 31/12/2011 Amount %

Banknotes and coins 504.960 245.659 259.301 105,55%

Foreign currency cash 23.268 16.037 7.231 45,09%

Total 528.228 261.696 266.532 101,85%

Inter-bank loans (item 20 of assets)

Table 2.1

Breakdown of assets item 20 “Inter-bank loans”

The item 20 "Loans to banks" includes all amounts due from banks, regardless of their technical form, with the exceptionof loans represented by securities which are returned to item 40 of assets. These receivables are stated at their estimatedrealizable value.The item "On demand" includes all current accounts and demand deposits held with other foreign and San Marinobanks in Euro and in foreign currency.The item "Time deposits - currency" includes the deposit guarantying the operation of the prepaid credit cards previouslytraced in item 120 "Other assets".The absolute change in positive of EUR 19,007,233 (50.83%) is mainly due to liquidity coming from new customers indeposits maturing within 6 months.

31/12/2012 31/12/2011 Variation

In EuroIn foreign

currencyIn Euro

In foreign

currencyAmount %

Sight credits: 25.309.070 1.259.937 25.435.332 1.394.976 (261.301) (0,97%)

- Free deposits 18.644.697 - - - 18.644.697 -

- Current accounts 6.664.373 1.259.937 25.435.332 1.394.976 (18.905.998) (70,47%)

- Other - - - - - -

Other credits : 29.000.000 832.010 10.563.476 - 19.268.534 182,41%

- Term deposits 29.000.000 832.010 10.000.000 - 19.832.010 198,32%

- Current accounts - - - - - -

- Repos and reverse repos - - - - - -

- Others - - 563.476 - (563.476) (100,00%)

Total 54.309.070 2.091.947 35.998.808 1.394.976 19.007.233 50,83%

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BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012

Table 2.2

Breakdown of cash credits to banks

The item "Non-performing loans" includes a credit which the Institute holds in respect of the "Credito Sammarinese SpAbeing wound up." This credit has been carefully written down for the full amount.The remaining loans are shown under "Performing loans", considered collectable and therefore no further adjustmentshave not made.

31/12/2012 31/12/2011

Gross

exposure

Total value

adjustmentsNet exposure

Gross

exposure

Total value

adjustmentsNet exposure

Bad and doubtful loans : 44.677 44.677 - 1.376.197 812.721 563.476

- Non-performing loans 44.677 44.677 - 1.376.197 812.721 563.476

- Substandard loans - - - - - -

- Restructured loans - - - - - -

- Past due/ overrun loans - - - - - -

- Unsecured loans to countries at risk - - - - - -

Performing loans 56.401.017 - 56.401.017 36.830.308 - 36.830.308

Total 56.445.694 44.677 56.401.017 38.206.505 812.721 37.393.784

Table 2.3

Changes in bad and doubtful loans to banks

The table shows the increases and decreases occurred during the financial year in the amount of gross exposures.The Institute has carried out the zeroing following payments amounting to EUR 364,293 ("Collection"), of the old debtsowed by no. 2 foreign issuers that were in default status for an amount of EUR 1,011,904 ("Cancellation").

Non-

performing

loans

Substandard

loans

Restructured

loans

Past due/

overrun loans

Unsecured

loans to

countries at

risk

Opening gross exposure 1.376.197 - - - -

of which: for past-due interests - - - - -

Increases : 44.677 - - - -

- inflow from loans 44.475 - - - -

- past-due interests 202 - - - -

- Other increases - - - - -

Decreases : 1.376.197 - - - -

- outflow to loans - - - - -

- write-offs 1.011.904 - - - -

- collections 364.293 - - - -

- arising from sales - - - - -

- Other decreases - - - - -

Closing gross exposure at 31/12/2012 44.677 - - - -

of which: for past-due interests 202 - - - -

Table 2.4

Changes in total value adjustments on “Inter-bank loans”

The table shows the movements during the year in the amount of the value adjustments on loans to banks. In relation towhat has been previously described in Tables 2.2 (Credito Sammarinese SpA in LCA) and 2.3 (Cancellation), it has beenundertaken to increase the value adjustments on loans, which at the end of 2011 stood at EUR 812,721, of EUR 608,153

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BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012

Non-

performing

loans

Substandard

loans

Restructured

loans

Past due/

overrun loans

Unsecured

loans to

countries at

risk

Performing

loans

Opening total adjustments 812.721 - - - - -

Increases : 608.153 - - - - -

- Value adjustments 608.153 - - - - -

of which: for past-due interests 202 - - - - -

- Utilization of allowance for possible loan losses

- - - - - -

- Transfers from other categories of loans

- - - - - -

- Other increases - - - - - -

Decreases : 1.376.197 - - - - -

- Value recoveries from valuation - - - - - -

of which: for past-due interests - - - - - -

- Value recoveries from collection - - - - - -

of which: for past-due interests - - - - - -

- Write-offs 1.011.904 - - - - -

- Transfers from other categories of loans

- - - - - -

- Other decreases 364.293 - - - - -

Closing total adjustments at 31/12/2012 44.677 - - - - -

of which: for past-due interests 202 - - - - -

Table 2.5

Composition of item “Inter-bank loans” according to residual life

The residual life corresponds to the time interval between the date of the financial statements and the contractualmaturity of each transaction. To meet the liquidity needs of customers around 50% of loans to banks are at sight. In thecase of bound operations, the deadline does not exceed 6 months. The security deposit previously described in Table2.1 is attributed to the category of "Expiry date not given".

31/12/2012 31/12/2011

Sight 26.569.007 26.830.308

From 1 day to 3 months 22.000.000 5.000.000

From 3 months+ to 6 months 7.000.000 5.000.000

From 6 months+ to 1 year - -

From 1 year+ to 18 months - -

From 18 months+ to 2 years - -

From 2 years+ to 5 years - -

5 years+ - -

No term 832.010 563.476

Total 56.401.017 37.393.784

Customer loans (item 30 of assets)

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BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012Table 3.1

Breakdown of assets item 30 “Customer loans”

The item 30 "Loans to customers" is the collection of credits arising from loan agreements entered into with customers,whatever is their technical form, and are stated at their estimated realizable value.The items "C/c assets (at sight/other receivables)" include the summation of the debit balances on current accounts,including interest, in the form of current account according to the maturity of the loan itself.The items "Other", "Discounted portfolio and sbf" and "Other loans" include credits arising from financing import / exporttransactions, open positions for portfolio advances, mortgage relationships with amortization schedule, grants and theloans.

31/12/2012 31/12/2011 Variation

In EuroIn foreign

currencyIn Euro

In foreign

currencyAmount %

Sight / non-revolving loans : 28.841.408 3.168 23.714.008 30 5.130.538 21,64%

- Current accounts 16.264.354 3.168 19.172.691 30 (2.905.199) (15,15%)

- Other 12.577.054 - 4.541.317 - 8.035.737 176,95%

Other loans : 12.943.637 - 4.840.844 - 8.102.793 167,38%

- Current accounts 2.556.122 - - - 2.556.122 -

- Discounted portfolio and subject to collection

8.060.973 - 1.967.874 - 6.093.099 309,63%

- Repos and reverse repos - - - - - -

- Other loans 2.326.542 - 2.872.970 - (546.428) (19,02%)

Total 41.785.045 3.168 28.554.852 30 13.233.331 46,34%

Table 3.2

Secured customer loans

This table indicates the total amount of "Loans to customers" that are assisted, in whole or in part, by real and personalguarantees. If a credit is partially guaranteed, only the amount of loans guaranteed has been shown.

Variation

31/12/2012 31/12/2011 Amount %

From mortgages 2.337.472 865.413 1.472.059 170,10%

From pledges on : 3.808.382 6.278.318 (2.469.936) (39,34%)

- Cash deposits 606.924 1.503.567 (896.643) (59,63%)

- Securities 3.201.458 4.774.751 (1.573.293) (32,95%)

- Other valuables - - - -

From guarantees by : 15.655.032 2.042.376 13.612.656 666,51%

- states 107.047 - 107.047 -

- other government bodies - - - -

- banks - - - -

- other finance companies - - - -

- other issuers 15.547.985 2.042.376 13.505.609 661,27%

Total 21.800.886 9.186.107 12.614.779 137,32%

Table 3.3

Breakdown of cash credits to customers

The table shows the situation of cash credits for each category of credit, as dictated by art. I.I.2 of Regulation no. 2007-

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BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 201207, which also includes credits arising from finance leases. That said, the total table item does not necessarily coincidewith the item 30 "Due to customers" because it takes into account the receivables originated by financial leasing in thefinancial statements in items 80 and 90 "Tangible and intangible assets".

31/12/2012 31/12/2011

Gross

exposure

Overall total

adjustmentsNet exposure

Gross

exposure

Total value

adjustmentsNet exposure

Bad and doubtful loans : 8.730.083 2.156.832 6.573.251 12.861.375 1.078.132 11.783.243

of which: from financial leases - - - - - -

- Non-performing loans 2.424.062 1.583.405 840.657 5.620.301 1.046.717 4.573.584

of which: from financial leases - - - - - -

- Substandard loans 6.293.684 572.810 5.720.874 1.437.955 23.820 1.414.135

of which: from financial leases - - - - - -

- Restructured loans - - - - - -

of which: from financial leases - - - - - -

- Past due / overrun loans 12.337 617 11.720 5.803.119 7.595 5.795.524

of which: from financial leases - - - - - -

- Unsecured loans to countries at risk - - - - - -

Performing loans 42.925.953 171.275 42.754.678 20.359.997 957 20.359.040

of which: from financial leases 7.540.120 404 7.539.716 3.587.401 - 3.587.401

Total 51.656.036 2.328.107 49.327.929 33.221.372 1.079.089 32.142.283

The value adjustments due to the physiological risks on performing loans amount to about 0.4% of the same.

Table 3.4

Changes in bad and doubtful loans to customers

This table provides a representation of the up and down changes that occurred during the financial year in the amountof gross exposures of doubtful credits.During 2012 the Institute has been revised in full all amounts receivable in an analytical way, providing for theirreclassification taking into account the risk involved. In 2012, the entire exposure to the Delta Group (Carifin Italia SpA inliquidation and Plusvalore SpA) was classified as substandard and therefore represents almost all the item "Otherincreases".

Non-

performing

loans

Substandard

loans

Restructured

loans

Past due/

overrun loans

Unsecured

loans to

countries at

risk

Opening gross exposure 5.620.301 1.437.955 - 5.803.119 -

of which: for past-due interests 354.815 - - - -

Increases : 1.140.780 7.293.684 - 12.336 -

- inflow from performing loans 789.873 71.791 - 12.284 -

- past-due interests 76.264 - - 52 -

- other increases 274.643 7.221.893 - - -

Decreases : 4.337.019 2.437.955 - 5.803.118 -

- outflow to loans - 385.474 - 81.986 -

- write-offs 4.325.382 1.000.000 - 6.292 -

- collections 11.637 880.573 - - -

- arising from sales - - - - -

- other decreases - 171.908 - 5.714.840 -

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BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012Closing gross exposure on 31/12/2012 2.424.062 6.293.684 - 12.337 -

of which: for past-due interests 161.572 - - 52 -

Table 3.5

Changes in total value adjustments on customer loans

This table shows the changes that occurred during the year in the amount of the total value adjustments on cash.

Non-

performing

loans

Substandard

loans

Restructured

loans

Past due/

overrun loans

Unsecured

loans to

countries at

risk

Performing

loans

Opening total adjustments 1.046.717 23.820 - 7.595 - 957

Increases : 4.862.069 1.572.810 - 617 - 861.286

- Value adjustments 4.754.612 1.000.000 - - - 861.286

of which: for past-due interests - - - - - -

- Utilization of allowance for possible loans

- - - - - -

- Transfers from other categories of loans

107.457 572.810 - 617 - -

- Other increases - - - - - -

Decreases : 4.325.381 1.023.820 - 7.595 - 690.968

- Value recoveries - - - - - -

of which: for past-due interests - - - - - -

- Value recoveries from collection - - - - - -

of which: for past-due interests - - - - - -

- Write-offs 4.325.381 1.000.000 - 6.292 - 35.207

- Transfers to other categories of loans - 23.820 - 1.303 - 655.761

- Other decreases - - - - - -

Closing total adjustments on

31/12/20121.583.405 572.810 - 617 - 171.275

of which: for past-due interests - - - - - -

Table 3.6

Composition of assets item “Customer loans” according to residual life

The term "residual life" means the time interval between the date of the financial statements and the contractualmaturity of each transaction. In particular, for transactions with repayment plans, reference was made to the remaining

duration of a single instalment.

31/12/2012 31/12/2011

Sight 24.928.542 20.837.607

From 1 day+ to 3 months 2.168.560 -

From 3 months+ to 6 months 3.668.827 393.535

From 6 months+ to 1 year 1.325.054 261.144

From 1 year+ to 18 months 1.283.650 168.070

From 18 months+ to 2 years 1.101.010 168.821

From 2 years+ to 5 years 7.101.508 995.305

5 years+ 6.802.238 1.156.712

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BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012No term 948.540 4.573.688

Total 49.327.929 28.554.882

Bonds and other debt securities and shares, quotas and other capital securities

(items 40 and 50 of assets)

Table 4.1

Composition of investment and trading securities

The securities in the portfolio are exclusively owned bonds issued by sovereign states, banks and private companiesbelonging to zone A.The trading portfolio consists of securities held for trading and/or maintained for the cash requirements. The investment

portfolio, as required by law, is valued at purchase or transfer value from another portfolio, while the trading portfolio isvalued at its market value.

Investment Trading

Bonds and other debt securities : 14.182.678 42.003.708

- issued by public bodies 2.621.239 5.320.917

- issued by banks 11.018.913 28.682.696

- issued by financial institutions 542.526 5.230.242

- issued by other bodies - 2.769.853

Shares, quotas and other capital securities - -

Total at 31/12/2012 14.182.678 42.003.708

Table 4.2

Breakdown of investment securities

Investment securities consist of bonds issued by sovereign States and banks.

31/12/2012 31/12/2011

Book Value Market Value Book Value Market Value

Debt securities : 14.182.678 13.860.946 14.542.694 11.997.517

- Bonds 14.182.678 13.860.946 12.773.414 10.675.849

listed 6.055.824 6.037.842 - -

unlisted 8.126.854 7.823.104 12.773.414 10.675.849

- Other debt securities - - 1.769.280 1.321.668

listed - - - -

unlisted - - 1.769.280 1.321.668

Capital securities : - - - -

- listed - - - -

- unlisted - - - -

Totals 14.182.678 13.860.946 14.542.694 11.997.517

Table 4.3

Annual variations to investment securities

31/12/2012 31/12/2011

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BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012Opening balance 14.542.694 10.269.507

Increases : 20.274.848 6.723.187

- Purchases - -

of which: debt securities - -

- Value recoveries - -

- Transfers from trading portfolio 19.702.823 6.604.151

- Other variations 572.025 119.036

Decreases : 20.634.864 2.450.000

- Sales 4.408.398 -

of which: debt securities - -

- Redemptions 7.105.980 1.450.000

- Value adjustments 547.498 -

of which: lasting devaluations - -

- Transfers to trading portfolio 8.401.223 1.000.000

- Other variations 171.765 -

Closing balance 14.182.678 14.542.694

Table 4.4

Breakdown of “Trading securities”

31/12/2012 31/12/2011

Market value Market value

Debt securities : 42.003.708 35.785.338

- Bonds 42.003.708 35.785.338

listed 11.656.580 -

unlisted 30.347.128 35.785.338

- Other debt securities - -

listed - -

unlisted - -

Capital securities : - 395.481

- listed - 395.481

- unlisted - -

Total 42.003.708 36.180.819

Table 4.5

Annual variations to “Trading securities”

31/12/2012 31/12/2011

Opening balance 36.180.819 29.496.973

Increases : 263.121.853 265.308.772

- Purchases 251.970.573 261.447.727

of which: debt securities 250.890.075 254.758.823

of which: capital securities 1.080.498 6.688.904

- Value recoveries and revaluation 1.028.591 2.861.045

- Transfers from investment portfolio 8.401.223 1.000.000

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BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012- Other variations 1.721.466 -

Decreases : 257.298.964 258.624.926

- Sales and redemption 237.344.090 251.853.986

of which: debt securities 235.856.923 245.010.607

of which: capital securities 1.487.167 6.843.379

- Value adjustments and revaluation 174.550 166.789

- Transfers to investment portfolio 19.702.823 6.604.151

- Other variations 77.501 -

Closing balance 42.003.708 36.180.819

The valuation of investment securities is based on market value as at 12/31/2012. The effect of this method finds itseffects under the item "Write-downs and write-ups" and "Value adjustments and write-downs."

Transactions on own shares (item 110 of assets)

During 2012 repurchase and sale of own shares in the portfolio have not been entered.

Investments (items 60 and 70 of assets)

The Bank does not hold investments in other companies.

Intangible fixed assets (item 80 of assets)

Table 7.1

Movements and description of assets item 80 “Intangible fixed assets”

This table shows the change of the intangible assets in the balance sheet at their acquisition cost, net of direct straight-line depreciation.The item "Purchases" consists mainly of the purchase of the software and costs of transition to the new informationGesbank system as well as costs incurred for the design and implementation of new branches of Rovereta, BorgoMaggiore and Dogana.

31/12/2012 Leased assets Set up chargesOther deferred

charges

Opening balance 226.915 - - 226.915

Increases : 642.656 - - 642.656

- Purchases 642.656 - - 642.656

- Value recoveries - - - -

- Revaluations - - - -

- Other variations - - - -

Decreases : 123.732 - - 123.732

- Sales - - - -

- Value adjustments 123.732 - - 123.732

of which, depreciations 123.732 - - 123.732

of which, lasting devaluations - - - -

- Other variations - - - -

Closing balance at 31/12/2012 745.839 - - 745.839

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Tangible fixed assets (item 90 of assets)

Table 8.1

Movements and description of assets item 90 “Tangible fixed assets”

The table below shows the movements in property, plant and equipment recorded in the balance sheet at theiracquisition cost, net of accumulated depreciation.There was an increase in "Purchases" for the acquisition of new assets leased to third parties under finance leases and

purchases of tangible assets related to the preparedness of the new branches in Rovereta, Borgo Maggiore andDogana.

31/12/2012 Leased assetsAssets to be

leasedReal estate

Other

tangible

assets

Opening balance 3.726.974 3.587.401 - - 139.573

Increases : 6.267.206 5.573.054 - - 694.152

- Purchases 6.267.206 5.573.054 - - 694.152

- Value recoveries - - - - -

- Revaluations - - - - -

- Other variations - - - - -

Decreases : 1.717.136 1.620.739 - - 96.397

- Sales 386.237 385.837 - - 400

- Value adjustments 1.330.346 1.234.349 - - 95.997

of which, depreciations 1.330.346 1.234.349 - - 95.997

of which, lasting devaluations - - - - -

- Other variations 553 553 - - -

Closing balance at 31/12/2012 8.277.044 7.539.716 - - 737.328

Below is the analytical composition of item 90 "Tangible fixed assets":

Purchase costAccumulated

depreciationBook value

Movable property: 1.287.456 (550.128) 737.328

- Furniture and various furnishings 557.440 (308.809) 248.631

- Plant and equipment 528.214 (161.789) 366.425

- Electrical and electronic machinery 170.802 (56.395) 114.407

- Vehicles 31.000 (23.135) 7.865

Movable assets under finance lease: 18.750.420 (11.210.704) 7.539.716

- Vehicles 1.458.243 (482.308) 975.935

- Equipment 103.158 (13.520) 89.638

- Fleet 307.513 (257.141) 50.372

- Plants 16.881.506 (10.457.735) 6.423.771

Other assets (items 120 and 130 of assets)

Table 9.1

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BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012Breakdown of assets item 120 “Other assets”

31/12/2012 31/12/2011

Maintenance margins - -

Premiums paid for options - -

Others : 10.500.712 5.350.915

- Other debtors 95.401 340.589

- Effects received from correspondent banks 213.008 116.300

- Effects from SBF customers 6.046.816 2.450.974

- Effects after collection from customers 310.921 24.208

- Illiquid effects 3.593.275 -

- Transitional accounts-items to be settled 35.991 -

- I.G.R. advances and withholding of the Tax Office 203.576 327.939

- Other items 1.724 2.090.905

Total 10.500.712 5.350.915

Table 9.2

Composition of assets item 130 “Accrued revenues and deferred expenses”

With particular reference to this item, it is evident that for the year 2012 the Institute has not directly adjusted up or downthe asset accounts to which accruals and deferrals relate as provided by art. IV.I.13 of Regulation no. 2008-02 of theCentral Bank.

31/12/2012 31/12/2011

Accrued revenues on : 1.238.896 57.622

- on loans and grants 15.678 -

- on foreign transactions 34.631 -

- on banks 308.316 53.722

- on securities 869.168 -

- on leasing transactions 1.579 -

- on other transactions 9.524 3.900

Deferred expenses 125.254 39.790

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BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012Section B/2Section B/2Section B/2Section B/2

INFORMATION ON THE STATEMENT OF ASSETS ANDINFORMATION ON THE STATEMENT OF ASSETS ANDINFORMATION ON THE STATEMENT OF ASSETS ANDINFORMATION ON THE STATEMENT OF ASSETS ANDLIABILITIES: LIABILITIESLIABILITIES: LIABILITIESLIABILITIES: LIABILITIESLIABILITIES: LIABILITIES

Debts with banks (item 10 of liabilities)

Table 10.1

Description of item of liabilities 10 “Debts with banks”

The table shows the debts that the Institute has towards San Marino and foreign banks.There are no particular deviations from the previous year if not due to movements of items on correspondent accounts.

31/12/2012 31/12/2011 Variation

In Euro In foreign

currency

In Euro In foreign

currency

Amount %

Sight debts : 154.078 - 107.535 - 46.543 43,28%

- Current accounts overdrafts 154.078 - 107.535 - 46.543 43,28%

- Demand deposits - - - - - -

- Other - - - - - -

Term or notice debt : - - - - - -

- Current accounts overdrafts - - - - - -

- Time deposits - - - - - -

- Repos and reverse repos - - - - - -

- Other loans - - - - - -

Total 154.078 - 107.535 - 46.543 43,28%

Table 10.2

Composition of debts with banks according to residual life

Please note that "residual life" means the time interval between the date of the financial statements and the contractualmaturity of each transaction.As can be seen, the Institute does not have debts to other banks other than those relating to the ordinary operation.

31/12/2012 31/12/2011

Sight 154.078 107.535

From 1 day+ to 3 months - -

From 3 months+ to 6 months - -

From 6 months+ to 1 year - -

From 1 year+ to 18 months - -

From 18 months+ to 2 years - -

From 2 years+ to 5 years - -

5 years+ - -

No term - -

Total 154.078 107.535

Debts with customers (item 20 of liabilities)pagina 34 di 51

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Table 11.1

Breakdown of item 20 of liabilities “Debts with customers”

This table lists all the amounts due to customers regardless of their technical form, except those represented by financialinstruments which are brought back to item 30 of liabilities.Compared to the year 2011, the item "Expiry or with notice" shows a substantial reduction of customers 'investments inthe technical form of repurchase agreements, but, at the same time, it also shows an increase in the item "At sight" ofliquidity in the customers' accounts.

31/12/2012 31/12/2011

In euroIn foreign

currencyIn euro

In foreign

currency

Sight debts : 36.471.137 2.331.305 20.379.997 1.548.421

- Current accounts overdrafts 34.873.151 2.331.305 19.728.207 1.548.421

- Sight savings deposits 722.726 - 651.790 -

- Other 875.260 - - -

Term or notice debts: 4.020.284 - 20.527.440 -

- Time deposits - - - -

- Time savings deposits - - - -

- Repos and reverse repos 3.317.296 - 20.527.440 -

- Other funds 702.988 - - -

Total 40.491.421 2.331.305 40.907.437 1.548.421

Table 11.2

Composition of debts with customers according to residual life

The table shows how the amounts due to customers have maturity up to 1 year.

31/12/2012 31/12/2011

Sight 38.802.442 21.928.418

From 1 day+ to 3 months 2.365.459 18.902.913

From 3 months+ to 6 months 1.102.003 1.624.527

From 6 months+ to 1 year 552.822 -

From 1 year+ to 18 months - -

From 18 months+ to 2 years - -

From 2 years+ to 5 years - -

5 years+ - -

No term - -

Total 42.822.726 42.455.858

Funds (items 60, 70 and 80 of liabilities)

Table 12.1

Movements of item 60 of liabilities “Staff retirement allowances”

As required by law, the TFR is paid annually to employees of the Institute. Accordingly, the balance at the end of 2012coincides with the relative share of the current year to be settled within the next year.

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BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 201231/12/2012 31/12/2011

Opening balance 28.587 47.589

Increases : 174.449 53.712

- Provisions 174.449 53.712

- Other variations - -

Decreases : 28.587 72.714

- Utilization 28.587 72.714

- Other variations - -

Closing balance 174.449 28.587

Table 12.2

Breakdown of item 70 of liabilities “Risks and fees funds”

31/12/2012 31/12/2011

Taxes and fees fund - -

Fund for post-employment benefits and similar obligations - -

Other funds : 30.734 -

- Fund for paid and unused leave 30.734 -

Total 30.734 -

Table 12.4

Shifting of sub-item c) “Other provisions”

“It was allocated to the item Paid unused leave” lurking in the previous item 40 "Other liabilities" for EUR 29,817, moved in2012 for uses of EUR 28,831 and provisions of EUR 29,748

31/12/2012 31/12/2011

Opening balance - -

Increases : 59.565 -

- Provisions 29.748 -

- Other variations 29.817 -

Decreases: 28.831 -

- Utilization 28.831 -

- Other variations - -

Closing balance 30.734 -

Other liabilities (items 40 and 50 of liabilities)

Table 13.1

Composition of item 40 of liabilities “Other liabilities”

31/12/2012 31/12/2011

Maintenance margins - -

Premiums received for options - -

Other : 11.470.809 3.941.321

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BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012- Cheques in circulation 264.491 13.451

- Transferor of SBF effects 9.793.833 2.536.603

- Transferor of After-collection effects 501.837 69.494

- Due to Tax Office 240.670 137.000

- Transitional accounts and items to be settled 171.134 545.917

- Other creditors 498.844 638.856

Total 11.470.809 3.941.321

Table 13.2

Composition of item 50 of liabilities “Accrued expenses and deferred revenues”

Please note that, as for item 50 of the assets, the Institute has not adjusted directly the increased or decreased liabilityaccounts to which accruals and deferrals relate as provided by art. IV.I.13 of Regulation no. 2008-02 of the Central Bank.

31/12/2012 31/12/2011

Accrued expenses on : 1.351.678 693.687

- on certificates of deposit 1.261.407 426.290

- on savings deposits 34.660 -

- on repurchase agreements 3.770 183.886

- on bonds 50.435 63.304

- other transactions 1.406 20.207

Deferred revenues 2.852 -

Corporate capital, reserves, issue premium, subordinated liabilities, fund for

general banking risks and profit for the financial year (items 90, 100, 110, 120,

130, 150 and 160 of liabilities)

Table 14.1

Composition of item 90 of liabilities “Fund for general banking risks”

The "Provision for general banking risks" set up to cover the general business risks to which the Bank is exposed, during theyear had the following changes:- Transfer of EUR 250,000 to the "Provision for loan losses" for value adjustments as approved by the Board of Directors on

04/06/2012;- Reconstitution of the fund with a contribution of EUR 500,000 as approved by the Board of Directors on 12/19/2012;- Use of EUR 500,000 of the fund as a result of a write-down of a capitalized asset on 12/31/2012. Please refer to the notesto Table 25.7 - Breakdown of item 160 "Value adjustment of financial assets" for a further discussion on the operation.

31/12/2012 31/12/2011

Opening balance 250.000 250.000

Inflow in the financial year 500.000 -

Utilization in the financial year 750.000 -

Closing balance - 250.000

Table 14.2

Breakdown of item 100 of liabilities “Subordinated liabilities”

Based on the recent provisions of the Central Bank, the bond buybacks can no longer be traced in item 40 "Debtsecurities and financial instruments", but it shall be handed directly down to the bonds stated in the liabilities. Therefore,

the difference from the previous year is due to the bond buybacks by customers for a total value of EUR 20,000.

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Variation

31/12/2012 31/12/2011 Amount %

Subordinated liabilities 7.980.000 8.000.000 (20.000) (0,25%)

Table 14.3

Breakdown of item 110 of liabilities “Corporate capital or endowment fund”

During the financial year, taking into account the negative trend of the pending cases relating to non-performing loans,the shareholders' meeting, noting the losses, has resolved to reduce the share capital by EUR 4,802,000, use part of thereserves for EUR 1,189,410, proposing the simultaneous reconstruction of the share capital through the issue of no. 4,802shares with a unit value of EUR 1,000 fully subscribed by the shareholders.At the end of July 2012 a further operation was completed to increase the share capital by EUR 3,200,000 which currentlyamounts to EUR 16,200,000 (fully paid up).

Variation

31/12/2012 31/12/2011 Amount %

Number of shares 16.200 13.000 3.200 24,62%

Nominal value 1.000 1.000 - -

Corporate capital 16.200.000 13.000.000 3.200.000 24,62%

Table 14.5

Breakdown of item 130 of liabilities “Reserves”

With a resolution dated May 30, 2012, the shareholders' meeting approved the allocation of profits of the year 2011 asfollows:- Contribution of EUR 738 to the "Ordinary reserve"- Contribution of EUR 2,954 to the "Extraordinary reserve"The use of reserves has already been detailed in the item 110.

Variation

31/12/2012 31/12/2011 Amount %

Ordinary reserve 738 445.866 (445.128) (99,83%)

Extraordinary reserve 2.954 738.322 (735.368) (99,60%)

Reserve for own transactions - - - -

Other reserves 786 5.222 (4.436) (84,95%)

Total 4.478 1.189.410 (1.184.932) (99,62%)

Table 14.7

Breakdown of item 160 “Profit (Loss) for the financial year”

Variation

31/12/2012 31/12/2011 Amount %

Profit/Loss for the year 106.685 3.693 102.992 2788,84%

Table 14.8

Variation to net equity in the last 4 years

31/12/2012 31/12/2011 31/12/2010 31/12/2009

Corporate capital 16.200.000 13.000.000 13.000.000 13.000.000

Uncalled capital - - - -

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BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012Issue premium - - - -

Ordinary reserve 738 445.866 439.677 211.096

Other reserves 3.740 743.544 919.544 -

Operating performance 106.685 3.693 6.189 1.142.903

Profits (Losses) carried forward - - - -

Fund for general banking risks - 250.000 250.000 250.000

Total 16.311.163 14.443.103 14.615.410 14.603.999

Table 14.9

Table of net equity variations

We summarize the key events that have characterized the changes in shareholders' equity during the financial year:- Allocation of the financial year 2011 profit entirely in capital reserves for EUR 3,693, as approved by the shareholdersmeeting on May 30, 2012;- Reduction of the share capital by EUR 4,802,000 and simultaneous re-establishment of the same amount, as approvedby the shareholders meeting on May 15, 2012;- Use of capital reserves and fund for general banking risks for the coverage of non-performing loans, as approved bythe shareholders meeting on May 15, 2012;- Increase in share capital of EUR 3,200,000, as approved by the General meeting on June 15, 2012, to date fully paid.

Value at

31/12/2011Profit allocation

Other

variations

Profit for the

financial year

Value at

31/12/2012

Fund for general banking risks 250.000 - (250.000) - -

Corporate capital 13.000.000 - 3.200.000 - 16.200.000

Issue premium - - - - -

Reserves: 1.189.410 3.693 (1.188.625) - 4.478

a) Ordinary reserve 445.866 738 (445.866) - 738

b) Extraordinary reserve 738.322 2.955 (738.323) - 2.954

c) Other reserves 5.222 - (4.436) - 786

Profit (Loss) for the financial year 3.693 (3.693) - 106.685 106.685

Total Net Equity 14.443.103 - 1.761.375 106.685 16.311.163

Revaluation reserves (item 140 of liabilities)

None.

Prudential aggregates

Table 16.1

Prudential aggregates

Amount - %

Regulatory capital

- Basic assets 15.565.324

- Supplementary assets 2.200.000

- Elements to be deducted 4.232.433

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BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012- Assets for supervisory purposes 13.532.891

Assets at risk and capital adequacy ratio

- Weighted risks assets 65.720.440

- Assets for supervisory purposes/Weighted risks assets 20,59%

Guarantees and commitments

Table 17.1

Composition of “Guarantees issued”

Variation

31/12/2012 31/12/2011 Amount %

Endorsement credits of a trade nature 903.263 884.196 19.067 2,16%

Endorsement credits of a financial nature 231.812 261.473 (29.661) (11,34%)

Assets pledged as collateral security - - - -

Total 1.135.075 1.145.669 (10.594) (0,92%)

Table 17.2

Composition of credit commitments

Variation

31/12/2012 31/12/2011 Amount %

Credit commitments of a trade nature : 903.263 884.196 19.067 2,16%

- Acceptances - - - -

- Guarantees and endorsements 903.263 884.196 19.067 2,16%

- Strong comfort letter - - - -

- Other - - - -

Credits commitments of a financial nature : 231.812 261.473 (29.661) (11,34%)

- Acceptances - - - -

- Guarantees and endorsements 231.812 261.473 (29.661) (11,34%)

- Strong comfort letter - - - -

- Other - - - -

Total 1.135.075 1.145.669 (10.594) (0,92%)

Table 17.5

Composition of “Spot commitments”

The operations of repurchase agreements, which are present in the memorandum accounts at 2011 year-end,amounting to EUR 21,148,027, were not covered by the survey during the year 2012 at it is expected an explicitrecognition of the internal assets and liabilities, depending on the type of transaction, the value of receivables orpayables connected.The item "Commitments to exchange financial instruments with certain use" of this table includes amounts for purchasingand selling securities that, at the date of the balance sheet, had not yet reached the settlement date (purchases from

regular sales of EUR 74,233 and by regular sale of EUR 74,262).The item "Commitments to disburse funds for uncertain use" includes available margins on lines of credit granted by thecustomer for a total of EUR 82,000.

Variation

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BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 201231/12/2012 31/12/2011 Amount %

Commitments to grant finance certain to be

called on- - - -

of which: commitments for financing to be granted - - - -

Commitments to exchange financial

instruments certain to be called on148.496 21.148.027 (20.999.531) (99,30%)

Commitments to grant finance not certain to

be called on :82.000 - 82.000 -

of which: passive margins usable on credit lines 82.000 - 82.000 -

of which: put option issued - - - -

Commitments to exchange financial

instruments not certain to be called on- - - -

Other commitments - - - -

Total 230.496 21.148.027 (20.917.531) (98,91%)

Table 17.6

Composition of “Forward commitments”

The item "Trades" lists all the outstanding off-balance transactions at year-end relating to contracts of sale not yet settled.The contracts involving the exchange of two currencies have been shown with reference to the single currency to bepurchased.

Coverage Negotiation Other transactions

Trades : - 927.158 -

- Financial instruments - - -

purchases - - -

sales - - -

- Currencies - 927.158 -

currency against currency - - -

purchases against EUR - 458.600 -

sales against EUR - 468.558 -

Deposits and loans : - - -

- to be given - - -

- to be received - - -

Derivative contracts - - -

Concentration and distribution of assets and liabilities

Table 18.1

Major risks

Variation

31/12/2012 31/12/2011 Amount %

Amount 15.215.828 7.628.853 7.586.975 99,45%

Number 5 4 1 25,00%

Table 18.2

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BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012Risks with related parties

Variation

31/12/2012 31/12/2011 Amount %

Amount 4.317.297 2.017.616 2.299.681 113,98%

Number 12 1 11 1100,00%

Table 18.3

Distribution of customer loans for main debtor categories

Variation

31/12/2012 31/12/2011 Amount %

States - - - -

Other public bodies - - - -

Financial companies 5.677.972 7.191.638 (1.513.666) (21,05%)

Non-financial companies 25.708.873 7.118.205 18.590.668 261,17%

of which Industry 8.158.816 2.877.083 5.281.733 183,58%

of which Construction 28.731 36.342 (7.611) (20,94%)

of which Services 17.521.326 4.204.780 13.316.546 316,70%

Households 15.237.658 13.914.979 1.322.679 9,51%

Other 2.703.426 3.917.461 (1.214.035) (30,99%)

Total 49.327.929 32.142.283 17.185.646 53,47%

Table 18.4

Temporal distribution of assets and liabilities

This table shows a time cross-section of the remaining life of the asset and liability of the balance sheet. The column"Deadline not conferred" shows the doubtful credits and receivables for which there was found an appropriateallocation of temporal relevance.

Total Sight

From 1

day+ to 3

months

From 3

months+

to 6

months

From 6

months+

to 1 year

From 1

year+ to

18 months

From 1

year+ to

18 months

From 18

months+

to 2 years

From 18

months+

to 2 years

From 2

years+ to

5 years

From 2

years+ to

5 years

More than

5 years

More than

5 yearsNo term

F V F V F V F V

ASSETS:

Inter-bank loans 56.401.017 26.569.007 22.000.000 7.000.000 - - - - - - - - - 832.010

Customer loans 49.327.929 24.928.542 2.168.560 3.668.827 1.325.054 148.267 1.135.383 109.270 991.740 306.205 6.795.302 4.504 6.797.734 948.541

Bonds and other debt securities

56.186.386 - 7.213.241 1.241.444 20.769.147 14.073.139 10.859.020 2.030.395 - - - - - -

Off-balance sheet operations

2.136.466 9.058 171.233 943.158 243.424 34.000 - 34.600 - 250.309 450.684 - -

LIABILITIES:

Debts with banks 154.078 154.078 - - - - - - - - - - - -

Debts with customers

42.822.726 38.802.442 2.365.459 1.102.003 552.822 - - - - - - - - -

Debts

represented by securities:

- bonds - - - - - - - - - - - - - -

- certificates of deposit

95.493.100 5.659.000 28.783.000 26.435.000 34.216.100 400.000 - - - - - - - -

- other securities - - - - - - - - - - - - - -

Other liabilities:

cheques in circulation

264.491 - 264.491 - - - - - - - - - - -

Subordinated liabilities

7.980.000 - - - 4.980.000 - - - - - 3.000.000 - - -

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Banca Sammarinese di Investimento S.p.A.

BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012Of-balance sheet operations

1.001.421 - 74.263 927.158 - - - - - - - - - -

Suspence accounts

Table 19.1

Suspence accounts

The Institute has set Asset Management among its products whose item "Asset management", at the end of the year,shows a total amount of € 17,264,481 consisting of cash, deposited entirely at our Institute, and equity financialinstruments and debt issued by us.The item "Financial instruments held on deposit - of which fin. tools and other securities issued by the bank (equitysecurities)" also include some BSI shares for a value of EUR 12,312,000.

31/12/2012 31/12/2011

Asset management : 17.264.481 -

- Customer asset management 17.264.481 -

of which cash 2.559.333 -

of which debt securities 13.372.068 -

of which debts 1.333.080 -

- Portfolios managed by third parties - -

Securities custody and management : 128.053.021 105.288.179

- Deposited third party securities 71.846.636 62.014.090

of which: owned issued securities (debts) 7.980.000 12.972.000

of which: owned issued securities (equities) 12.312.000 -

of which: third party securities deposited with third parties 47.444.886 45.767.090

- Owned securities deposited with third parties 56.206.385 43.274.089

Securities and other values related to the custodian bank's activity - -

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Banca Sammarinese di Investimento S.p.A.

BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012Part CPart CPart CPart C

INFORMATION ON THE STATEMENT OF EARNINGSINFORMATION ON THE STATEMENT OF EARNINGSINFORMATION ON THE STATEMENT OF EARNINGSINFORMATION ON THE STATEMENT OF EARNINGS

Interests (items 10 and 20 of profit and loss account)

Table 20.1

Breakdown of item 10 “Interests received and proceeds”

The general increase of the items listed below is mainly attributable to the increase in the number of customers andvolumes, the result of the new corporate mission as retail bank.

Variation

31/12/2012 31/12/2011 Amount %

On inter-bank loans : 1.265.159 408.140 857.019 209,98%

- Current accounts 640.823 119.352 521.471 436,92%

- Deposits 624.336 288.788 335.548 116,19%

- Other loans - - - -

of which: on financial leases - - - -

On customer loans: 1.357.527 1.175.029 182.498 15,53%

- Current accounts 659.329 798.768 (139.439) (17,46%)

- Deposits - - - -

- Other loans 698.198 376.261 321.937 85,56%

of which: on financial leases 183.303 137.123 46.180 33,68%

On debt securities from banks : - - - -

- Certificates of deposit - - - -

- Bonds - - - -

- Other securities - - - -

On debt securities from customers (other

issuers) :

1.602.611 1.428.659 173.952 12,18%

- Bonds 1.602.611 1.428.659 173.952 12,18%

- Other securities - - - -

Total 4.225.297 3.011.828 1.213.469 40,29%

Table 20.2

Breakdown of item 20 “Interest paid and costs”

"Interest expense and similar charges" are increasing compared to last financial year, in particular, the item "On debtsecurities to customers" for customer investments in certificates of deposit.

Variation

31/12/2012 31/12/2011 Amount %

On debts with banks : 9.154 1.750 7.404 423,09%

- Current accounts overdrafts 9.154 1.750 7.404 423,09%

- Deposits - - - -

- Other debts - - - -

On debts with customers : 270.997 683.449 (412.452) (60,35%)

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Banca Sammarinese di Investimento S.p.A.

BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012- Current accounts overdrafts 255.590 111.442 144.148 129,35%

- Deposits 15.407 12.754 2.653 20,80%

- Other debts - 559.253 (559.253) (100,00%)

On debts represented by securities with banks: - - - -

of which: on certificates of deposit - - - -

On debts represented by securities with

customers:2.435.089 1.295.767 1.139.322 87,93%

of which: on certificates of deposit 2.162.393 953.843 1.208.550 126,70%

On subordinated liabilities 179.291 - 179.291 -

Total 2.894.531 1.980.966 913.565 46,12%

Dividends and other revenues (table for item 30)

Table 21.1

Breakdown of item 30 “Dividends and other revenues”

Variation

31/12/2012 31/12/2011 Amount %

On shares, quotas and other capital financial instruments

5.650 - 5.650 -

On holdings - - - -

On holdings in bank group companies - - - -

Totals 5.650 - 5.650 -

Commissions (table for items 40 and 50)

Table 22.1

Breakdown of item 40 “Commissions earned”

Variation

31/12/2012 31/12/2011 Amount %

Guarantees issued 6.067 3.215 2.852 88,71%

Credit derivatives - - - -

Investment services: 49.717 680 49.037 7.211,32%

- receipt and transmission of orders (let. D1 enc. 1

LISF)30.063 - 30.063 -

- execution of orders (let. D2 enc. 1 LISF) 4.384 680 3.704 544,71%

- management of securities portfolio (let. D4 enc.1

LISF)15.270 - 15.270 -

- placement of securities (let. D5 and D6 enc.1 LISF) - - - -

Consultancy services - - - -

Distribution of third-party services and products other

than placement :- - - -

- asset management - - - -

- insurance products - - - -

- other services or products - - - -

Collection and payment services 103.732 48.020 55.712 116,02%

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Banca Sammarinese di Investimento S.p.A.

BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012Custodian bank services - - - -

Securities custody and management 58.594 77.378 (18.784) (24,28%)

Trust services 5.750 56.126 (50.376) (89,76%)

Operation of tax services and treasury - - - -

Currency transactions 20.820 - 20.820 -

Other services 22.668 95.848 (73.180) (76,35%)

Total 267.348 281.267 (13.919) (4,95%)

Table 22.2

Breakdown of item 50 “Commissions paid”

Variation

31/12/2012 31/12/2011 Amount %

Guarantees received - - - -

Credit derivatives - - - -

Investment services : 62.426 - 62.426 -

- receipt and transmission of orders (let. D1 enc.1 LISF) - - - -

- order execution (let. D2 enc. 1 LISF) 2.757 - 2.757 -

- management of securities portfolios (let. D4 enc.1

LISF) :

59.669 - 59.669 -

own portfolio 30.012 - 30.012 -

third-party portfolio 29.657 - 29.657 -

- placement of securities (let. D5 and D6 enc. 1 LISF) - - - -

Door-to-door sale of financial instruments, products

and services

- - - -

Collection and payment services 46.399 50.344 (3.945) (7,84%)

Other services 81.255 24.354 56.901 233,64%

Total 190.080 74.698 115.382 154,46%

Profits and losses from financial operations (table for item 60)

Tabled 23.1

Composition of item 60 “Profits (Losses) from financial operations”

Securities transactions Currency transactions Other transactions

Revaluations 1.029.090 -

Write-downs 174.550 -

Other profits / losses (+/-) 1.573.011 78.913 -

Total by operative division 2.427.551 78.913 -

of which: government securities 404.912

of which: other debt-based financial instruments 2.011.496

of which: capital financial instruments 11.143

of which: contracts derived from financial

instruments-

Administrative costs (table for item 90)

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Banca Sammarinese di Investimento S.p.A.

BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012Table 24.1

Number of employees by category

As a result of the development plan, please note how the employees have more than doubled bringing the totalnumber of employees from 10 of 2011 year-end to the current 24. The workforce consists of 11 directors (1 generalmanager, 2 deputy general managers and 8 officials responsible for the operational areas and branches), 1 managerand 12 employees. 67% of current employees are male while the remaining 33% are women.

AverageNumber as of

31/12/2012

Number as of

31/12/2011

Senior managers 10 11 1

Managers 1 1 1

Remaining personnel : 10 12 8

- office employees 10 12 8

- other personnel - - -

Total 21 24 10

Table 24.2

Breakdown of sub-item “b) Other administrative costs”

The item under consideration shows that "Other administrative expenses" have been downsized compared with last yearby about 15% thanks to a policy of revision of total expense and a renegotiation of the same that led, for example, asaving on the item of expenditure "Canons and network services" (reduction of 42.68%) thanks to the adoption of a newbanking information system (Gesbank application) and the management of the entire banking operations that currentlyis performed entirely within the Institute and no longer, in part, outsourced to external companies.

Variation

31/12/2012 31/12/2011 Amount %

Professional consultations 280.744 214.163 66.581 31,09%

Rental expenses 136.984 103.760 33.224 32,02%

Network services fee 273.555 477.225 (203.670) (42,68%)

Insurance 29.182 21.410 7.772 36,30%

Maintenance and repair 17.161 75.081 (57.920) (77,14%)

Utilities and service fees 44.558 24.718 19.840 80,27%

Supervisory and associative burdens 66.388 62.524 3.864 6,18%

Taxes and duties 7.155 55.701 (48.546) (87,15%)

Other general expenses 156.973 153.066 3.907 2,55%

Total 1.012.700 1.187.648 (174.948) (14,73%)

Adjustments, write-backs and provisions (items 100, 110, 120, 130, 140, 150, 160

and 170 of profit and loss account)

Table 25.1

Composition of items 100 and 110 “Value adjustments on tangible and intangible fixed assets”

The difference compared to the previous financial year is due to the value adjustments on the purchase of new capitalequipment to carry out the banking activity (incidence on the difference of about 6%) in addition to net value of theassets held under finance leases reported in items 80 and 90 of Assets in the Balance Sheet (94%). The latter will not havean impact on the operating result as they will be offset from registration under the item 70 "Other operating income" ofthe part of capital relating to finance lease.

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Banca Sammarinese di Investimento S.p.A.

BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012Variation

31/12/2012 31/12/2011 Amount %

Value adjustments on intangible fixed assets : 123.732 79.740 43.992 55,17%

- Software 90.268 70.666 19.602 27,74%

- Multi-year fees 33.464 9.074 24.390 268,79%

Value adjustments on tangible fixed assets : 1.330.346 343.389 986.957 287,42%

- Furniture 48.308 53.070 (4.762) (8,97%)

- Systems and technical equipment 28.549 14.015 14.534 103,70%

- Electronic office devices 12.940 6.718 6.222 92,62%

- Vehicles 6.200 6.200 - -

- Goods in leasing 1.234.349 263.386 970.963 368,65%

Total 1.454.078 423.129 1.030.949 243,65%

Table 25.4

Composition of item 140 “Value adjustments on credits and provisions for guarantees and commitments”

As previously described in the tables relating to the "Due from banks" and "Loans to customers", the Institute proceededto revise receivables from third parties during all the financial year. We, therefore, proceeded to attribute all theadjustments made on the basis of the expected realizable values directly in the Income Statement.

Variation

31/12/2012 31/12/2011 Amount %

Value adjustments on credits 6.859.753 75.000 6.784.753 9.046,34%

of which: lump-sum adjustments for country risk - - - -

of which: other lump-sum adjustments 165.749 8.552 157.197 1.838,13%

Provisions for guarantees and commitments - - - -

of which: lump-sum adjustments for country risk - - - -

of which: other lump-sum provisions - - - -

Total 6.859.753 75.000 6.784.753 9.046,34%

Table 25.5

Different types of movement of the financial year

31/12/2012 31/12/2011 Variation

Analytical Lump sum Amount %

Total cash credit write-downs: 324.880 156.089 75.000 405.969 541,29%

- Non performing loans 324.880 - 42.628 282.252 662,13%

- Substandard loans - - 23.820 (23.820) (100,00%)

- Other loans - 156.089 8.552 147.537 1.725,18%

Total losses on cash credits : 6.369.124 9.660 - 6.378.784 -

- Non performing loans 5.337.285 - - 5.337.285 -

- Substandard loans 1.000.000 - - 1.000.000 -

- Other loans 31.839 9.660 - 41.499 -

Total cash value adjustments 6.694.004 165.749 75.000 6.784.753 9.046,34%

Total advances on guarantees and

commitments:- - - - -

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Banca Sammarinese di Investimento S.p.A.

BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012- Guarantees - - - - -

- Commitments - - - - -

Total 6.694.004 165.749 75.000 6.784.753 9.046,34%

Table 25.7

Composition of item 160 “Value adjustments on financial fixed assets”

Value adjustments on financial fixed assets relate entirely to the write-down of a subordinated bond, held within theportfolio owned by the Bank under investment securities.This security had been issued by Dutch credit institute "SNS BANK" and purchased by the Bank on 12/15/2010 for anominal value of EUR 550,000 and a historical cost of EUR 547,184.

Following the unexpected financial collapse of the issuing company and the subsequent nationalization of the institutionby the Dutch government, in the early months of 2013, the security has been withdrawn from the market.The Board of Directors of the Bank, in the light of the above facts and believing that the value of the financial asset wasnot recoverable, during its meeting dated February 28, 2013, has therefore resolved:- The total devaluation of the security, recorded in the Financial Statements as at 12/31/2012 for an amount of EUR547,498, partially covered by use of the Fund for general banking risks amounting to EUR 500,000;- The activation of all legal actions aimed at obtaining compensation, while recognizing their uncertainty.

Variation

31/12/2012 31/12/2011 Amount %

Value adjustments 547.498 - 547.498 -

of which on investments - - - -

of which on investments in group companies - - - -

of which on other equity instruments - - - -

of which on debt instruments 547.498 - 547.498 -

of which on derivative financial instruments - - - -

Other items in the profit and loss account (items 70, 80, 190 and 200 of profit and

loss account)

Table 26.1

Composition of item 70 “Other operating proceeds”

As shown in the footnote to Table 25.1, this item includes the share capital of the finance lease payments accrued during the financial

year and is the greater impact part of this item.

Variation

31/12/2012 31/12/2011 Amount %

Proceeds for recovery expenses 194.394 3.126 191.268 6.118,62%

Other proceeds lease principal 1.234.349 263.385 970.964 368,65%

Total 1.428.743 266.511 1.162.232 436,09%

Table 26.2

Composition of item 80 “Other operating costs”

Variation

31/12/2012 31/12/2011 Amount %

Rounding-off - 92 (92) (100,00%)

Total - 92 (92) (100,00%)

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BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012

Table 26.3

Composition of item 190 “Extraordinary proceeds”

It is recognized that the Bank Shareholders' Meeting dated May 15, 2012, considering that the interim loss as at03/31/2013 of approximately 6,000,000 Euros was an exceptional and extraordinary event and, therefore, it deemedadvisable to reduce the share capital and the partial use of reserves affecting the income statement under the item"extraordinary income" for a total amount of EUR 5,990,623.90. This is in order to cover the loss cited above, The above items include also gains on disposal of investment securities for EUR 425,673, contingent assets for EUR 55,309and other extraordinary income for EUR 18,128.

Variation

31/12/2012 31/12/2011 Amount %

Extraordinary proceeds 6.489.736 120.039 6.369.697 5.306,36%

Total 6.489.736 120.039 6.369.697 5.306,36%

Table 26.4

Composition of item 200 “Extraordinary costs”

The item is characterized by the fee for the exercise of reserved activities attributable to the year 2009 amounting to EUR75,000 and, given the proposed tax loss for the year, the fee for the year 2010 for the same amount.With reference to the previous financial year, the remaining costs of an extraordinary nature reduced.

Variation

31/12/2012 31/12/2011 Amount %

Non-deductible bank tax 150.000 75.000 75.000 100,00%

Other contingent liabilities 20.882 111.795 (90.913) (81,32%)

Total 170.882 186.795 (15.913) (8,52%)

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Banca Sammarinese di Investimento S.p.A.

BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012BILANCIO DI ESERCIZIO 2012Section DSection DSection DSection D

OTHER INFORMATIONOTHER INFORMATIONOTHER INFORMATIONOTHER INFORMATION

Directors and statutory auditors

Table 27.1

Remuneration

As shown in the table, no fees were given during this financial year to the Directors as a result of their formalrenunciation.

Variation

31/12/2012 31/12/2011 Amount %

Directors - - - -

Statutory auditors 26.466 25.000 1.466 5,86%

Total 26.466 25.000 1.466 5,86%

Other information

None.

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